Upbeat Earnings News May Lead To Continued Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to extend the upward trend seen over the past several sessions.

The markets may continue to benefit from a positive reaction to the latest batch of earnings news from several big-name companies.

Shares of UPS (UPS) are moving sharply higher in pre-market trading after the delivery giant reported third quarter results that exceeded analyst estimates on both the top and bottom lines.

General Electric (GE) may also move to the upside after reporting better than expected third quarter earnings and raising its full-year guidance.

Shares of Facebook (FB) are also seeing some pre-market strength after the social media giant reported third quarter earnings that beat expectations, although its revenues came in below estimates.

On the other hand, shares of Lockheed Martin (LMT) are likely to come under pressure after the defense contractor reported weaker than expected third quarter revenues and lowered its full-year guidance.

Stocks moved mostly higher during trading on Monday, extending the notable advance seen last week. With the continued upward move, the Dow and the S&P 500 reached new record closing highs.

The major averages all closed in positive territory, although the tech-heavy Nasdaq outperformed its counterparts. While the Nasdaq jumped 136.51 points or 0.9 percent to 15,226.71, the S&P 500 rose 21.58 points or 0.5 percent to 4,566.48 and the Dow edged up 64.13 points or 0.2 percent to 35,741.15.

The strength on Wall Street partly reflected optimism about more upbeat earnings news, with a slew of big-name companies due to report their quarterly results this week.

Upbeat earnings news has contributed to a recent upward trend on Wall Street, as most companies have reported better than expected results.

Trading activity was somewhat subdued, however, as a lack of major U.S. economic data kept some traders on the sidelines.

Some traders may also have been reluctant to make more significant moves ahead of the Federal Reserve’s monetary policy meeting next week.

The Fed is likely to leave interest rates unchanged but could announce plans to begin scaling back its asset purchase program.

Shares of Telsa (TSLA) moved sharply higher on the day after car rental giant ordered 100,000 of the electric car maker’s vehicles for its fleet.

PayPal (PYPL) also saw significant strength after the financial technology company said it is not pursuing an acquisition of Pinterest (PINS). On the other hand, shares of Pinterest saw a steep drop on the news.

Consumer products company Kimberly-Clark (KMB) also moved to the downside after reporting weaker than expected third quarter earnings.

Steel stocks showed a substantial move to the upside on the day, driving the NYSE Arca Steel Index up by 3.5 percent.

Considerable strength was also visible among gold stocks, as reflected by the 1.6 percent gain posted by the NYSE Arca Gold Bugs Index. The strength in the gold sector came amid an increase by the price of the precious metal.

Oil and retail stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are rising $0.40 to $84.16 a barrel after closing unchanged at $83.76 a barrel on Monday. Meanwhile, after climbing $10.50 to $1,806.80 an ounce in the previous session, gold futures are sliding $7.80 to $1,799 an ounce.

On the currency front, the U.S. dollar is trading at 114.15 yen compared to the 113.71 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1615 compared to yesterday’s $1.1608.

Asia

Asian stocks ended mixed on Tuesday, with Japanese shares leading regional gains ahead of the October 31 lower house election, while fresh worries about China’s property sector hit Hong Kong and mainland markets.

Chinese shares ended lower, with property developers coming under selling pressure after Modern Land missed a bond payment, adding to worries about wider effects of the debt crisis at behemoth China Evergrande Group.

Worries over a planned pilot real estate tax scheme also dented sentiment. The benchmark Shanghai Composite index slipped 12.22 points, or 0.3 percent, to 3,597.64, while Hong Kong’s Hang Seng Index ended down 93.76 points, or 0.4 percent, at 26,038.27.

Japanese shares rallied after earnings optimism took the Dow and S&P 500 to record highs overnight. Investors were also reacting to the results of a poll suggesting that Prime Minister Fumio Kishida’s ruling Liberal Democratic Party is likely to keep substantially more than half the seats in parliament in this weekend’s general election.

The Nikkei 225 Index surged 505.60 points, or 1.8 percent, to 29,106.01, while the broader Topix closed 1.2 percent higher at 2,018.40.

Heavyweights Uniqlo-owner Fast Retailing and SoftBank Group jumped 5 percent and 1.8 percent respectively. Sony Group advanced 2.6 percent ahead of its earnings release due Thursday.

Panasonic soared 5.6 percent after the company unveiled a prototype battery to help key customer Tesla lower costs.

Australian shares gave up early gains to end on a flat note as gains in tech stocks were offset by declines among commodity-related stocks.

Newcrest Mining, Evolution and Northern Star Resources fell 1-2 percent, tracking lower gold prices after an uptick in the U.S. dollar and bond yields. Regis Resources slumped 6.1 percent after its September quarter gold production and sales missed analysts’ estimates.

Energy companies Santos, Oil Search and Origin Energy dropped 1-2 percent, while mining heavyweights BHP and Rio Tinto ended on a mixed note. Tech stocks bucked the weak trend, with buy-now-pay-later firm Afterpay climbing 3.3 percent.

Seoul stocks rose for the second straight day amid expectations of strong corporate earnings. The benchmark Kospi jumped 28.54 points, or 0.9 percent, to close at 3,049.08.

Bio, bank and tech shares topped the gainers list. Market bellwether Samsung Electronics rose 1.3 percent and No. 2 chipmaker SK Hynix added 2 percent. Top lender Kakao Bank jumped 3.3 percent.

Investors shrugged off central bank data showing that South Korea’s economy grew at a slower pace in the third quarter, as robust exports were offset by weak domestic demand and construction and facility investments.

Europe

European stocks have risen on Tuesday as strong earnings updates from the likes of UBS and Reckitt Benckiser helped investors shrug off fresh worries about China’s property sector.

As inflation worries mount, investors looked ahead to a slew of central bank meetings in Europe, Japan and Canada this week for directional cues.

While the German DAX Index has jumped by 1 percent, the French CAC 40 and the U.K.’s FTSE 100 Index are both up by 0.7 percent.

Swiss drug maker Novartis has moved to the upside. After reporting an increase in adjusted operating profit, the company said it has commenced a strategic review of the Sandoz Division.

UBS has also risen after the bank posted its best quarterly profit since 2015, helped by robust trading activity.

Lysol cleaning products maker Reckitt Benckiser Group has soared in London. The company raised its full-year forecast after delivering better than expected sales for the third quarter.

Essentra has also jumped. After delivering third quarter trading in line with expectations, the plastics foam products company said it is expecting to deliver fiscal 2021 adjusted operating profit in the range of analysts’ forecasts.

Whitbread has also moved notably higher. The pub, hotel and restaurant operator said it is seeing a strong rebound in demand and is better placed than most to deal with cost increases.

Kion Group has also spiked. The German manufacturer of materials handling equipment backed its full-year view after a very strong nine-month period.

On the other hand, computer peripherals maker Logitech International has slumped after it warned of supply-chain disruptions.

Petrofac shares have also plunged. The oil services firm booked a first-half loss and unveiled plans to tap shareholders in a 180 million-pound ($247.54 million) fundraising.

Orange Group shares have also tumbled. The telecom operator reported a 0.4 percent decline in third quarter revenues, primarily due to the lower level of co-financing of the Fiber network received in France.

U.S. Economic Reports

Standard & Poor’s is scheduled to release its report on home prices in major metropolitan areas in the month of August at 9 am ET.

At 10 am ET, the Commerce Department is due to release its report on new home sales in the month of September. New home sales are expected to jump by 2.7 percent to an annual rate of 760,000.

The Conference Board is also scheduled to release its report on consumer confidence in the month of October at 10 am ET. The consumer confidence index is expected to edge down to 109.0 in October from 109.3 in September.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $60 billion worth of two-year notes.

Stocks In Focus

Shares of Hasbro (HAS) are moving notably higher in pre-market trading after the toymaker reported third quarter earnings that exceeded analyst estimates.

Secondhand luxury goods retailer The RealReal (REAL) is also likely to see initial strength after Raymond James upgraded its rating on the company’s stock to Outperform from Market Perform.

On the other hand, shares of Polaris (PII) may come under pressure after the recreational vehicle maker reported third quarter earnings in line with estimates but cuts its full-year guidance on supply chain constraints.

Glass and specialty materials maker Corning (GLW) is also likely to move to the downside after reporting weaker than expected third quarter results.