(Reuters) – Wall Street was set to rise on Tuesday, as an upbeat corporate earnings season and a pickup in global deals activity lifted demand for risky equities, although gains were capped by concerns around a surge in the Delta variant of the coronavirus.
Shares of Dupont rose 2.2% in premarket trading after the industrial materials maker raised its full-year forecast for a second time.
Stronger-than-expected profit reports have ratcheted up already high forecasts of second-quarter results for Corporate America, with earnings now estimated to have climbed about 90% versus forecasts of 65.4% at the start of July, according to IBES data from Refinitiv.
Still, the three main U.S. stock indexes have slipped from record highs as investors booked profits amid lofty stock valuations and as concerns over slowing economic growth and rising cases of the Delta variant hit sentiment.
“Investors are not willing to sell at current levels, but are also not willing to commit to fresh capital due to rising COVID-19 cases and a possible change in taxes, which could lead the market to trade quite range-bound,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
A deepening regulatory crackdown in China has also sent jitters across the global technology sector. China’s Tencent Holdings (OTC:TCEHY) Ltd slumped as much as 10% in Asia after a Chinese state media outlet branded online games as “spiritual opium”.
Bond yields steadied after weaker-than-expected manufacturing data in the previous session sent them to their lowest since July 20. Shares of major U.S. banks, which generally track bond yields, also inched higher in early deals. [US/]
Focus on Tuesday will be on factory orders for June, while later in the week, traders will turn to data on the U.S. services sector and the monthly jobs report for July.
Industrial firm Cummins Inc (NYSE:CMI) gained 1.3% as it said it would explore options for its unit which makes filters, coolant and chemical products.
Under Armour Inc (NYSE:UAA) jumped 6.1% after raising its annual revenue forecast.
Drugmaker Eli Lilly (NYSE:LLY) and Co, on the other hand, slipped 1.9% as it reported a 2% drop in quarterly profit.