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As the earnings season gathers pace, investors will focus on how corporate America has fared against high interest rates and a challenging demand environment.
United Airlines Holdings (NASDAQ:UAL) Inc rose 2.6% in premarket trading as it also reported fourth-quarter earnings that topped Wall Street estimates on robust travel demand.
Analysts now expect year-over-year earnings from S&P 500 companies to decline 2.4% for the quarter, according to Refinitiv data, compared with a 1.6% decline in the beginning of 2023.
“Given the difficult backdrop, there is fear among some parts of the institutional investment market that U.S. earnings forecasts might still be too high for 2023 and stocks across the pond might not be able to sustain their current strength,” Russ Mould, investment director at AJ Bell, said.
Earnings from big U.S. banks were a mixed bag, with many stockpiling rainy-day funds preparing for a looming recession.
At 6:17 a.m. ET, Dow e-minis were up 19 points, or 0.06%, S&P 500 e-minis were up 6 points, or 0.15%, and Nasdaq 100 e-minis were up 16.5 points, or 0.14%.
Wall Street’s main indexes started the holiday-shortened week on a mixed note, with the Dow Jones Industrial Average snapping a four-day winning streak, while the Nasdaq clocked seven straight sessions of gains, its longest since November 2021.
Among other stocks, IBM (NYSE:IBM) Corp slipped 1.9% after Morgan Stanley (NYSE:MS) downgraded the company’s shares to “equal weight” from “overweight”, citing slowing revenue growth.
Moderna (NASDAQ:MRNA) Inc jumped 6.7% after the company said its experimental messenger RNA vaccine for respiratory syncytial virus (RSV) was 83.7% effective in preventing disease in adults aged 60 and older.
Investors now await quarterly results from Charles Schwab (NYSE:SCHW) Corp, PNC Financial Services Group Inc (NYSE:PNC) and Discover Financial Services (NYSE:DFS) on Wednesday.
U.S. stock markets logged strong gains in 2023 after a dismal last year on hopes that a moderation in inflationary pressures and some signs of cooling in the labor market could give the Federal Reserve cover to dial down the size of its interest rate hikes.
Retail sales data and final producer prices for December are due before the bell.
