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Market ReportWALL STREET

Stocks expected to break loose as half a dozen Dow Jones constituents report

After falling for four sessions in a row the Dow Jones was set to open sharply higher

Crates of Coca-Cola
A bit of fizz for breakfast

US indexes were set to shake off yesterday's lethargy and open sharply higher, following the lead of Asian markets.

The Dow Jones average, which closed 14 points lower yesterday at 24,449, was expected to open 157 points to the good at 24,606, while the S&P 500, which yesterday closed barely changed, was tipped to open at 6,287, up 17 points.

In Asia, Japan's Nikkei 225 rose 190 points to close at 22,278 while Hong Kong's Hang Seng index finished 382 points firmer at 30,636.

Ahead of the US open, most European exchanges were enjoying a good day with London's FTSE 100 up 26 at 7,425 and Germany's DAX up 28 at 12,601.

On the forex markets, the dollar index was down a smidgen at 84.93 from 84.97 overnight, as bond yields ebbed.

On the commodities markets, gold was trading US$3.60 higher at US$1,327.60 while West Texas intermediate was 22 cents higher at US$68.85.

“Heightened geopolitical tensions in the Middle East and growing optimism over OPEC’s supply cut have injected oil bulls with a renewed sense of confidence,” commented Lukman Otunuga, a research analyst at FXTM.

“With WTI Crude sprinting to levels not seen in over three years, it seems that market sentiment is turning increasingly bullish towards the commodity. While further upside could be on the cards for oil in the near term, the sustainability of the rally is a concern,” Otunuga suggested.

“WTI bulls may be heavily reliant on geopolitics to keep prices appreciating, which could expose oil to extreme downside risks if geopolitical tensions start to ease. With rising production from US Shale still a key market theme that continues to weigh on oil prices, it will be interesting to see how much oil appreciates before bears enter the scene,” the analyst concluded.

Back on the equities scene, six Dow Jones components have reported earnings since last night's close: 3M Co (NYSE:MMM), Caterpillar Inc (NYSE:CAT), Coca-Cola Co (NYSE:KO), Travelers Companies Inc (NYSE:TRV), United Technologies Corp (NYSE:UTX) and Verizon Communications Inc (NYSE:VZ).

Reaction to the updates has been mixed and is estimated to have added around three points to spread betting quotes for the index.

After-hours trading

Alphabet Inc (NASDAQ:GOOGL) and other members of the FANG tech titans may be increasingly under fire from governments but it is still making money hand over fist.

The Google owner's “A” shares were trading 0.6% higher at US$1,079.99 in pre-market trading after first quarter earnings and sales beat analysts' estimates.

The personal data harvesting behemoth announced earnings per share of US$9.93 that were comfortably above the consensus forecast of US$9.28.

Revenue of US$31.15bn was almost a billion smackers above the US$30.29bn expected by analysts.

Elsewhere in the tech sector, the share price reaction to the results of Cadence Design Systems Inc (NASDAQ:CDNS) put Alphabet in the shade.

The software and engineering services company's stock was up 14.3% at US$42 in screen-based trading after it revealed yesterday evening net income of US$113Mln on revenue of US$517mln; analysts had penciled in US$505mln for revenue.

Earnings per share of 40 cents were three cents higher than the market had been expecting.

Brokerage firm TD Ameritrade Holding Corp (NASDAQ:AMTD) was down 1.7% at US$60.15 despite a solid set of results for the second quarter of its fiscal year.

Underlying earnings per share of 73 cents per share were a penny ahead of the consensus forecast. Revenue of US$1.42bn was ahead of the consensus forecast of US$1.36bn while the broker revealed it processed around 943,000 trades a day during the first three months of the year.

 

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