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Merck & Co Inc gained 3.8% in premarket trade after a panel of
advisers to the U.S. Food and Drug Administration narrowly voted
to recommend the agency authorize the drugmaker's antiviral pill
to treat COVID-19.
U.S. stocks had slumped on Tuesday after Federal Reserve Chair
Jerome Powell in his testimony before the Senate Banking
Committee indicated that he no longer considers inflation as
"transitory".
He also said the U.S. central bank would consider bringing
forward plans for tapering its bond buying program at its next
meeting in two weeks.
The seemingly 'hawkish' comments served as a double whammy for
markets, which were already nervous about the spread of the
Omicron coronavirus variant and its potential to hinder a global
economic recovery.
"At this point, COVID does not appear to be the biggest
long-term Street fear, although it could have the largest impact
if the new (or next) variant turns out to be worse than
expected," Howard Silverblatt, senior index analyst for S&P and
Dow Jones indices, said in a note.
"That honor goes to inflation, which continues to be fed by
supply shortages, labor costs, worker shortages, as well as
consumers, who have not pulled back."
Investors were also awaiting a Fed report, known as the "Beige
Book", on current economic conditions to provide further insight
into the central bank's stance on inflation. The report is due
at 2:00 p.m. ET (1900 GMT).
Travel and leisure stocks rebounded, with cruiseliners Norwegian
Cruise Line, Carnival Corp, Royal Caribbean rising more than
2.5% each.
Occidental Petroleum led gains among the energy stocks, up 3.2%
as oil prices climbed over 4% ahead of OPEC's meeting. Shares of
major Wall Street lenders also moved higher after steep falls on
Tuesday. [O/R]
At 6:35 a.m. ET, Dow e-minis were up 289 points, or 0.84%.
The S&P 500 e-minis were up 53.75 points, or 1.18%, and Nasdaq
100 e-minis were up 223.75 points, or 1.39%, supported by gains
in mega-cap tech giants Amazon.com, Apple Inc, Tesla Inc, Google
owner Alphabet Inc, Meta Platforms and Microsoft Corp which
added between 1.2% and 1.7%.
Powell is also due to testify before a House Financial Services
Committee hybrid hearing at 10 a.m. ET.
On the economic data front, November readings on U.S. private
payrolls and manufacturing activity will be closely watched
later in the day to gauge the health of the American economy.
Among other stocks, Salesforce.com Inc forecast current-quarter
profit below estimates as it faces stiff competition from rivals
including Microsoft, sending its shares down 6%.
(Reporting by Devik Jain, Ambar Warrick and Medha Singh in
Bengaluru; Editing by Maju Samuel)
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