Stocks - U.S. Futures Higher on Big Tech Gains; Dow Futures Up 50 Pts

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Stocks - U.S. Futures Higher on Big Tech Gains; Dow Futures Up 50 Pts
Credit: © Reuters.

By Peter Nurse - U.S. stocks are set to open higher Friday, with the tech-heavy Nasdaq index set to outperform after stellar results from the likes of Apple (NASDAQ: AAPL ), Amazon (NASDAQ: AMZN ) and Facebook (NASDAQ: FB ).

Investors will also be studying negotiations over the next coronavirus stimulus as the Covid-19 pandemic's second wave continues to work its way through the central U.S.

At 7:05 AM ET (1105 GMT), US 500 Futures traded 5 points, or 0.2%, higher, Nasdaq 100 Futures up 108 points, or 1%. The Dow Futures contract rose 50 points, or 0.2%. These cash indexes are on pace for their fourth straight month of gains.

Apple, Amazon, Alphabet (NASDAQ: GOOGL ), and Facebook have driven markets higher in recent weeks, with the market capitalization of these four tech giants combined now making up 38% of the Nasdaq 100 index

Elsewhere, U.S. lawmakers are still struggling to find enough common ground to pass another stimulus package, a key sticking point being the $600 weekly pandemic unemployment benefit, which expires later Friday. A Republican proposal to slash that to $200 a week was rejected on Thursday.

“The enhanced unemployment benefit ($600 a week) has been a cornerstone in the rebound in consumption that was seen during May and June,” said analysts at Nordea, in a research note, and “a failure to prolong the program will likely add fuel to the stalling fire.”

The U.S. economy is already showing signs of stress. Initial jobless claims climbed to 1.43 million last week, rising for the second straight week, while GDP fell by a record 9.5% in absolute terms in the second quarter.

Friday will feature reports on personal income and spending , at 8:30 AM ET (1230 GMT), and the University of Michigan Consumer Sentiment at 10 AM ET. 

Meanwhile, the earnings season continues, with the likes of Merck (NYSE: MRK ), ExxonMobil (NYSE: XOM ), Chevron (NYSE: CVX ), Colgate-Palmolive (NYSE: CL ) reporting Friday. Caterpillar (NYSE: CAT ), a closely-watched proxy for business investment, rose 1.8% in premarket trading after handily beating expectations on both top and bottom lines. Under Armour (NYSE: UAA ) stock rose 19% after its second-quarter results proved less dire than feared.

Oil prices edged higher, recovering from three-week lows hit on Thursday in reaction to the U.S. GDP and jobless claims numbers. 

The Organisation of Petroleum Exporting Countries will soon become the focus after the group decided earlier this month to dial back production cuts, a move that will see an increase in production of about 2 million barrels a day starting in August. 

U.S. crude futures traded 0.6% higher at $40.14 a barrel, while the international benchmark Brent rose 0.4% to $43.42.

Elsewhere, gold futures rose 1.5% to $1,971.70/oz, while EUR/USD traded at 1.1844, largely unchanged.


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