Stock futures pulled up from early, mixed action on Wednesday, with Dow Jones stocks leading the recovery.
XFutures for the Dow Jones industrial average rose 0.4% above fair value, with General Electric (GE) jumping to an early lead after its fourth-quarter report. Nasdaq 100 futures shed early losses and climbed a fraction above the breakeven line, despite heavy losses from Texas Instruments (TXN) and American Airlines Group (AAL).
Futures for the S&P 500 and the Russell 2000 rose 0.2% apiece
The dollar slumped to its lowest level since Dec. 2014, measured by the ICE Dollar Index, after U.S. Treasury Secretary Steven Mnuchin told the World Economic Forum in Davos a weak dollar was good for the U.S. economy in the short term. The currency move helped to pressure stocks in Tokyo, where the Nikkei 225 dropped 0.7% on Wednesday. Europe’s market shifted lower, despite data showing the eurozone economy had opened 2018 at its fastest pace since 2006 and with consumer confidence at a 17-year high.
Real estate and homebuilding stocks will be on the radar Wednesday morning, with the Federal Housing Finance Agency’s Housing Price Index due out at 9 a.m. ET and December existing home sales data from the National Association of Realtors expected at 10 a.m. ET.
Microsoft Rated A Buy, United Leads Airlines Lower, Qualcomm Fined By EU
General Electric climbed 1.6%, despite Q3 earnings and revenue below analyst projections, as revenue from its oil, gas and energy segments outperformed expectations.
Microsoft (MSFT) popped 0.4% after Nomura initiated coverage on the stock with a buy rating and a 102 price target, 12% above Wednesday closing price. Microsoft shares are just out of buy range above an 86.209 buy point in a flat base.
United Technologies (UTX) took the hardest early hit among Dow Jones names, down 1.2%, despite adjusted fourth-quarter revenue and earnings above consensus views. But competition for its Otis elevator unit in China and an estimated $1.5 billion cash charge related to new tax laws hurt the unadjusted performance.
United Technologies shares closed Wednesday near new highs, up 10% from a mid-December breakout.
Apple (AAPL) gained 0.2% and all four of the FANG stock tech leaders traded in positive territory.
Payment processor Total Systems Services (TSS) gained 2.5% after reporting its fourth-quarter results late Tuesday.
United Contintental Holdings (UAL) dived more than 7%, after fourth-quarter earnings reported after Tuesday’s close topped analyst targets and revenue growth met views. But management forecast a 4% to 6% increase in capacity, stirring fears of similar moves among competitors. American and Delta Air Lines (DAL) each dropped more than 4% in premarket action.
United has formed a seven-month cup-with-handle base with a 79.10 buy point.
Chipmakers were under some firm early pressure, led by Texas Instruments, which backed off 7% in early action. The Dallas-based chip leader’s fourth-quarter results, reported late Tuesday, just met analysts expectations across the board. The report also said recently reformed tax laws would drop the company’s corporate tax rate to 18% from 31%.
Texas Instruments is extended, after a seven-week run up following a rebound from 10-week support in December.
LED chipmaker Cree (CREE) dropped 1.5% after mixed fiscal Q2 results.
Qualcomm (QCOM) shed 1.3%. European regulators imposed a $1.2 billion fine on the company after finding its had made illegal payments to Apple in order to secure exclusive use of its chips in a range of products, including smartphones. The EU said Qualcomm made the payments between 2011 and 2016, effectively shutting out competing bids and limiting competition.
Qualcomm shares ended Tuesday just below a 69 buy point in a three-month cup-with-handle base.
Coming Up: January PMI, Weekly Oil Inventories
Researcher Markit releases its composite purchasing managers index reading for January at 9:45 a.m. ET. The Energy Information Administration reports its weekly crude oil inventories estimates at 10:30 a.m. ET.
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