20, April 2017

US equity indexes to recover as financials turned higher

Wall Street index futures pointed to a higher open on Thursday as market participants looked ahead of remarks from US Treasury Secretary Steven Mnuchin later in the day.

US stock indexes ended mostly lower on Wednesday, falling under pressure after tech giant IBM reported mixed first-quarter results and as oil prices plunged nearly four percent following downbeat crude inventories data.

The Dow was down 120 points by the end of the session, with IBM slipping by five percent and costing around 60 of those points. Earnings were better-than-expected but sales dropped once again, marking the twentieth consecutive quarterly drawdown.

  • Dow Jones Industrial Average: -0.58% / 20404.49

  • Standard & Poor’s 500: -0.17% / 2338.17

  • Nasdaq Composite: +0.23% / 5863.03

The Standard & Poor’s 500 was also trading in red territory, closing about 0.2 percent lower in light of falling crude oil prices. The energy sector stocks notched down 1.4 percent in average as the barrel settled below the $50.50 mark.

The US Energy Information Administration said crude inventories fell by 1.034 million barrels in the week ended April 12, compared to an estimated reduction of 1.470 million barrels.

Financial components edged higher on Wednesday after Morgan Stanley reported strong revenues in the first three months of the year.

"We reported one of our strongest quarters in recent years. All our businesses performed well in improved market conditions [...] We are confident in our business model and the opportunities ahead, while recognizing that the environment remains uncertain." - CEO James Gorman

  • Abbott Laboratories (ABT) $0.480 vs $0.430 / +0.05 / +11.6%

  • American Express Co (AXP) $1.34 vs $1.28 / +0.06 / +4.9%

  • eBay Inc (EBAY) $0.490 vs $0.478 / +0.01 / +2.5%

  • Morgan Stanley (MS) $1.00 vs $0.883 / +0.12 / +13.3%

  • Qualcomm Inc (QCOM) $1.34 vs $1.19 / +0.15 / +12.8%

On Tuesday, investment bank Goldman Sachs took investors by surprise falling short from earnings expectations, cutting about six percent of its stock value and shaving around 73 points from the Dow Jones industrial average.

Political uncertainty continues to weigh on market sentiment, with French presidential elections on the spotlight. The first round will take place on April 23.

On the data front, Fed's Beige Book reported economic improvement in all 12 districts, which is seen as a positive factor for interest rate moves.

Today, focus will be directed to initial jobless claims, Philly Fed manufacturing index for April due to be released as of 12:30 GMT. Last but not least, Treasury Secretary will speak at 17:15 GMT.

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