US stocks will likely be in focus today, as investors await a flurry of major earnings reports.
Context: US stocks closed lower on Tuesday, after posting a strong rise earlier in the day. Technology sector took a major hit with investors growing cautious ahead of various earnings releases.
Details: Investors assessed recent earnings from various companies and were preparing for reports from some of the biggest companies. After the closing bell, Google parent Alphabet reported downbeat earnings for the latest quarter, although sales exceeded estimates. The company also disclosed a marked slowdown in advertisement sales during the quarter.
Investor sentiment improved on news of the US government’s recent moves to ease lockdown restrictions. Ohio and Pennsylvania reported loosening restrictions on economic activities.
On the other hand, economic data continued to signal the impact of coronavirus pandemic on the economy. The consumer confidence dipped to 86.9 in April, from 118.8 in March. The US trade deficit widened to $64.2 billion in March, from $59.9 billion in February, while the Case-Shiller home price index increased 4.2% for February.
After rising as much as 1.6% earlier in the session, the Dow fell 32.23 points to close at 24,101.55 on Tuesday. The S&P 500 declined 0.5%, while the Nasdaq 100 dipped 1.4%.
In earnings news, shares of 3M Co. rose 2.5% after the company reported upbeat results. However, Merck & Co’s shares slipped 3% even as the pharmaceutical giant reported upbeat results. The downturn was driven by the company slashing its 2020 guidance. United Parcel Service’s shares slipped 6% following weaker-than-expected profits in the first quarter.
In commodities, WTI (West Texas Intermediate) crude oil for June fell 3.4% to settle at $12.34 per barrel. Gold for June delivery slipped $1.60 to close at $1,722.20 an ounce on Tuesday.
What to watch: Markets will be looking for earnings reports from major companies, including Boeing, General Electric, Mastercard, Microsoft, Facebook and Tesla. US stocks are expected to start on a positive note today, with the stock futures pointing towards a higher open.
Investors also await the Federal Reserve’s interest rate decision and a few economic reports, including GDP growth and pending home sales. The US economy, which grew 2.1% in the fourth quarter, is expected to contract 4% in the first quarter. US pending home sales are expected to drop 10% in March, after a 2.4% rise in February.
Other Markets: Asian indices closed higher on Wednesday, with China’s Shanghai Composite, Hong Kong’s Hang Seng and India’s BSE Sensex up by 0.4%, 0.3% and 0.2%, respectively.