The S&P 500 and the Nasdaq were on pace to open higher on Wednesday after strong quarterly showing from heavyweights Alphabet and Amazon, while investors counted on more fiscal stimulus to aid an economic recovery.
Alphabet Inc jumped 7.3% in premarket trading as it benefited from lockdowns that drove retail and other advertisers online.
Amazon.com Inc gained about 2.6%, recovering from the initial shock of Jeff Bezos stepping down as CEO to an executive chairman role, handing over the reins to the head of cloud computing division. The retail giant also reported quarterly sales above $100 billion for the first time.
“Bezos will still be pulling strings – I don’t think this is material concern for the stock as it continues to deliver numbers that continue to exceed even the most bullish estimates,” said Neil Wilson, chief market analyst at Markets.com.
More than 80% of reports from S&P 500 companies so far have surpassed analysts’ earnings expectations, with 97% of reports from technology companies beating, according to IBES data from Refinitiv.
Wall Street’s main indexes finished sharply higher for a second straight day on Tuesday in a broad-based rally as market participants digested talks over the next round of stimulus.
Democrats in the U.S. Congress on Tuesday voted along the party lines to open debate on a fiscal 2021 budget resolution with coronavirus aid spending instructions, their first steps toward advancing President Joe Biden’s proposed $1.9 trillion package without Republican support.
“Economic recovery is on the way and the market is still very focused on technology … the focus will shift at some point in next couple of months to more value, recovery names and that’s where the opportunity is,” said Olivier Sarfati, head of equities at GenTrust in New York.
At 08:21 a.m. ET, S&P 500 E-minis were up 13.25 points, or 0.35% and Nasdaq 100 E-minis were up 90.75 points, or 0.67%.
Dow E-minis were nearly flat as U.S. biotech Amgen Inc dropped about 2.3% after providing a 2021 earnings forecast below estimates and saying it had paused or halted enrollment for clinical trials of three cancer drugs.
Videogame retailer GameStop Corp fell about 1% and movie theater operator AMC Entertainment Holdings Inc gained 3% in a social media-driven trading rollercoaster ride.
U.S. Treasury Secretary Janet Yellen is calling a meeting of top officials, including from the Securities and Exchange Commission and the Federal Reserve, this week to discuss market volatility.
On the economic front, the ADP National Employment Report showed hiring by U.S. private employers rebounded by 174,000 in January after a drop in December. A more comprehensive jobs report is expected on Friday.
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