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Stock Futures Rise Ahead of More Financial Earnings

Stock Futures Rise Ahead of More Financial Earnings

U.S. stock futures rose, suggesting indexes would eke out muted gains to end a choppy week, as investors awaited another batch of earnings from major companies.

Futures for the S&P 500 edged up 0.3% Friday. The broad stocks gauge rose 1.7% Thursday, its biggest one-day advance since March, after better-than-expected earnings and labor market data helped ease concerns about the economic outlook.

Contracts for the Dow Jones Industrial Average gained 0.3% Friday. Futures for the technology-focused Nasdaq-100 ticked up 0.2%.

Ahead of the bell in New York, shares of Alcoa rose 6.1% after the producer posted higher third-quarter sales Thursday, boosted by higher aluminum prices.

After a rocky patch for stocks, a strong batch of earnings from healthcare companies and banks including Morgan Stanley and Citigroup has buoyed the market in recent days. Investors remain concerned that supply-chain blockages and a steep rise in energy prices will fuel inflation, which may prompt central banks to withdraw stimulus measures faster than expected.

Money managers will parse quarterly reports from Goldman Sachs, PNC Financial Services Group and JB Hunt Transport Services before the market opens. Of the 35 companies on the S&P 500 that had reported earnings through Thursday, 80% had beaten analysts’ forecasts, according to FactSet, slightly better than the three-quarters that did so each quarter in 2019, before the pandemic. 

Energy markets extended a run-up Friday that has pushed oil and gas prices to multiyear highs and strained already snarled supply chains. Brent-crude futures, the benchmark in global oil markets, rose 1.1% to $84.93 a barrel, their highest intraday level in three years. 

In the bond market, yields on 10-year Treasury notes rose to 1.547% Friday, from 1.519% Thursday. Yields rise when bond prices fall.

Friday’s uptick in yields was in line with upbeat moves in stocks and commodities, though correlations between different markets are in flux as investors debate the inflation outlook, according to Richard McGuire, head of rates strategy at Rabobank. 

“We’ve seen an ebb and flow this week,” he said. Mr. McGuire expects the inflation burst to fade, as “high prices will sow the seed of their own downfall,” with consumers starting to spend less.

Japan’s yen continued its slide. Traders have sold off the currency on concerns that high oil and gas prices will knock economic growth in Japan, a major energy importer. The yen traded 0.4% lower at 114.14 per dollar, taking its losses for the week to 1.7%.

Overseas markets were broadly higher. The Stoxx Europe 600 rose 0.2%, led by shares of energy producers and travel-and-leisure companies. Shares of airlines including Ryanair and Wizz Air rose after the U.K. government said travelers returning to England from most countries would be able to take quick-fire coronavirus tests starting later this month. Current rules require a more expensive test.

In Asia, Japan’s Nikkei 225 gained 1.8%, Hong Kong’s Hang Seng rose 1.2% and China’s Shanghai Composite Index edged up 0.4%.

Stocks have rallied this week on better-than-expected earnings reports.

Photo: Richard Drew/Associated Press

Write to Joe Wallace at [email protected]

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Source: WSJ


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