MARKET SNAPSHOT: U.S. Stock Futures Rise After GDP Data Keeps Fed On Track For A Hike
28 October 2016 - 2:35PM
Dow Jones News
By Sara Sjolin, MarketWatch , Ryan Vlastelica
Amazon slumps more than 5% premarket
U.S. stock futures pointed to a modestly higher open on Friday
as the latest read on economic growth pointed to an economy that
continued to improve, albeit slowly, while also underlining the
belief that the Federal Reserve would raise interest rates in
December.
Futures had swung between positive and negative territory
throughout the session, with some mixed corporate results weighing
on major stock-index futures.
A preliminary read of third-quarter gross domestic product
showed the fastest pace of expansion since mid-2014
(http://www.marketwatch.com/story/gdp-hits-29-in-biggest-gain-since-mid-2014-2016-10-28),
with the economy growing 2.9%, in line with expectations. The
report showed acceleration from the growth rate of 1.4% seen in the
previous quarter.
The data was seen as doing little to change the view that the
Federal Reserve would raise interest rates at its December meeting.
The U.S. central bank has said it would raise rates when it deems
the economy strong enough to withstand such a move.
"This shows that the US is roughly on track. It's a natural
bounce back following a pretty underwhelming year so far," said
Luke Bartholomew, an investment manager at Aberdeen Asset
Management. "There's nothing here that will put the Fed off hiking
in December."
Futures for the Dow Jones Industrial Average rose 38 points, or
0.2%, to 18,120, while those for the S&P 500 index added 4.60
points, or 0.2%, to 2,128. Futures for the Nasdaq-100 index climbed
12.5 points, or 0.3%, to 4,819.
At current levels, the Dow is expected to rise slightly for the
week, while both the S&P 500 and Nasdaq are set for a weekly
loss.
The day's advance was limited by Amazon.com Inc.(AMZN), which
slumped 4.5% in premarket trading after posting disappointing
earnings late Thursday
(http://www.marketwatch.com/story/amazon-posts-smaller-than-expected-profit-increase-2016-10-27-164855144).
On the upside, Google-parent Alphabet Inc.(GOOGL) rose 1.5% before
the bell following stronger-than-expected earnings out on Thursday
(http://blogs.marketwatch.com/thetell/2016/10/27/alphabet-expected-to-report-stronger-earnings-and-sales-live-blog/).
Read:This market barometer says Trump still has a chance at the
White House
(http://www.marketwatch.com/story/this-market-barometer-says-trump-still-has-a-chance-at-the-white-house-2016-10-28)
The Fed is meeting next week, but expectations for a rate
increase are low ahead of the Nov. 8 election. Instead, markets are
pricing in a tightening at the December meeting, with the CME Group
data showing an 83% probability of a hike in December.
The ICE dollar index traded flat at 98.88 following the GDP
release.
See:
Movers and shakers: Shares of Baker Hughes Inc.(BHI) rallied 8%
before the bell after The Wall Street Journal reported that General
Electric Co.(GE) is in talks to merge its oil-and-gas business with
the oil-services company
(http://www.marketwatch.com/story/general-electric-said-to-explore-baker-hughes-purchase-2016-10-27).
Hershey Co.(HSY) gained 2% in premarket trading after the
chocolate company reported third-quarter earnings that beat
estimates
(http://www.marketwatch.com/story/hershey-third-quarter-earnings-beat-estimates-2016-10-28).
Amgen Inc.(AMGN) dropped 2.2% premarket after the biotechnology
company late Thursday beat third-quarter earnings expectations and
raised its profit outlook, but kept its sales outlook virtually
unchanged
(http://www.marketwatch.com/story/amgen-beats-profit-expectations-and-raises-its-outlook-2016-10-27).
U.S.-listed shares of Sanofi SA(SAN.FR) (SAN.FR) jumped 8.2%
after the French drug giant lifted its profit outlook
(http://www.marketwatch.com/story/sanofi-raises-profit-outlook-after-upbeat-results-2016-10-28).
Movers: Both Chevron Corp
(http://www.marketwatch.com/story/chevron-returns-to-profit-though-revenue-slides-2016-10-28).
(CVX) and Exxon Mobil Corp
(http://www.marketwatch.com/story/exxon-mobil-profit-and-revenue-slide-again-2016-10-28-84853357).(XOM)
reported sharp drops in their quarterly earnings, hurt by weak oil
prices.
Other markets: Asia markets closed mostly lower
(http://www.marketwatch.com/story/most-asian-markets-down-but-nikkei-trades-up-2016-10-27),
but with Japan's Nikkei 225 bucking the trend. The Japanese index
ended 0.6% higher as the yen weakened after data showed consumer
prices dropped in September.
Markets in Europe traded firmly lower
(http://www.marketwatch.com/story/european-stocks-drop-as-anheuser-busch-cuts-view-french-data-disappoint-2016-10-28)
and heading toward weekly losses.
Oil prices slumped
(http://www.marketwatch.com/story/oil-prices-hold-steady-ahead-of-weekend-opec-meeting-2016-10-28)
0.9%, while metals where mixed
(http://www.marketwatch.com/story/gold-futures-drift-lower-ahead-of-us-gdp-reading-2016-10-28).
(END) Dow Jones Newswires
October 28, 2016 09:20 ET (13:20 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.