Fred Imbert, Elliot Smith
At around 7:10 a.m. ET, Dow Jones Industrial Average futures were up 109 points, indicating a gain of nearly 150 points at the open. S&P 500 and Nasdaq 100 futures also pointed to strong gains at the open.
Apple shares gained more than 1% in the premarket after its quarterly results easily beat analyst expectations. The company’s results were driven in part because of an 8% uptick in iPhone sales, which totaled $55.96 billion.
“Apple pleasantly surprised investors on multiple fronts,but most importantly materially exceeded investor expectations on iPhone revenues, which returned to growth in the quarter much ahead of investor expectations,” J.P. Morgan analyst Samik Chatterjee said in a note.
McDonald’s, another Dow component, also posted better-than-expected quarterly results but the stock dropped 0.4%. Dow and ADP also reported profits that beat analyst estimates.
JOHANNES EISELE / AFP / Getty Images
Wednesday’s gains were capped, however, by a 2.4% loss in Boeing shares. The aerospace giant’s stock declined after Boeing said it expects 737 Max costs to roughly double what the company expected.
Wednesday’s gains come after the Dow snapped a five-day losing streak with a gain of more than 180 points. That move up helped the major indexes recover some of the losses from the largest sell-off of the year, which happened Monday amid global concern over the spread of the Chinese coronavirus.
Chinese officials said late Tuesday that the death toll has risen to 132 with total cases in China now standing at 5,974. The White House told U.S. airlines on Tuesday that the administration is considering a suspension of flights from China to the U.S.
Investors will be closely watching the U.S. Federal Reserve on Wednesday afternoon, as the central bank convenes for its first monetary policy meeting of the decade.
The main interest rate is widely expected to hold steady in the 1.50% to 1.75% range, but the market will likely be attuned late in the session to Fed Chair Jerome Powell’s speech, particularly any comments about the Fed’s repo program or the potential economic impact of the coronavirus outbreak.