Upbeat Earnings News May Strengthen Wall Street
By Investors Hub
Major US index futures are pointing to a higher opening on Tuesday, with stocks poised to add to the modest gains posted in the previous session.
The upward momentum for the markets comes on the heels of upbeat quarterly earnings news from some well-known companies.
Nonetheless, overall trading activity may remain somewhat subdued as many traders are away from their desks ahead of the Thanksgiving Day holiday on Thursday.
Following the mixed performance seen last week, stocks saw modest strength during trading on Monday. Buying interest was somewhat subdued, however, limiting the upside for the major averages.
The major averages all closed in positive territory. The Dow climbed 72.09 points or 0.3 percent to 23,430.33, the Nasdaq edged up 7.92 points or 0.1 percent to 6,790.71 and the S&P 500 inched up 3.29 points or 0.1 percent to 2,582.14.
News on the merger-and-acquisition may have generated some positive sentiment, with chipmaker Marvell Technology (MRVL) reaching an agreement to acquire Cavium (CAVM) for about $6 billion.
The Conference Board also released a report showing a much bigger than expected jump by its index of leading U.S. economic indicators in the month of October.
The report said the leading economic index surged up by 1.2 percent in October after inching up by a revised 0.1 percent in September.
Economists had expected the index to climb by 0.6 percent compared to the 0.2 percent drop originally reported for the previous month.
“The growth of the LEI, coupled with widespread strengths among its components, suggests that solid growth in the US economy will continue through the holiday season and into the new year,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at the Conference Board.
Nonetheless, traders seemed reluctant to make more significant moves amid continued uncertainty about U.S. tax reform and news of political instability in Germany.
The upcoming Thanksgiving Day holiday on Thursday is also likely to keep some traders away from their desks, leading to light trading throughout the week.
Electronic storage stocks showed a significant move to the upside over the course of the session, driving the NYSE Arca Disk Drive Index up by 1.8 percent. With the advance, the index reached its best closing level in over two years.
NetApp (NTAP) and Micron Technology (MU) turned in two of the storage sector’s best performances, jumping by 3.4 percent and 3.2 percent.
Considerable strength was also visible among networking stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Networking Index. The index reached its best closing level in over sixteen years.
Semiconductor and brokerage stocks also saw notable strength on the day, while gold, natural gas, and biotechnology stocks moved to the downside.