NEW YORK: Wall Street was set to open higher on Friday as investors shrugged off weaker-than-expected US economic growth data and focused on strong earnings from blue-chips and a slide in the dollar.
Gross domestic product increased at a 2.6 percent annual rate, the Commerce Department said in its advance fourth-quarter GDP report. A Reuters poll of economists had forecast the economy expanding at a 3.0 percent.
Another set of data showed new orders for key US-made capital goods unexpectedly fell in December.
But sentiment was boosted by upbeat results from Intel Corp and Honeywell International as well as declines in the dollar.
“The dollar move has attracted lot of attention for the right reasons, it’s a pretty important driver right now for other assets,” said Peter Cecchini, managing director and chief market strategist at Cantor Fitzgerald in New York.
US President Donald Trump in his address at the World Economic Forum in Davos warned trading partners that Washington would no longer tolerate unfair trade, saying predatory practices were distorting markets.
Markets have been moving on comments by top US officials at Davos this week, including Treasury Secretary Steven Mnuchin’s endorsement of a weak dollar.
Dow e-minis gained 35 points, or 0.13 percent, with 30,261 contracts changing hands.
S&P 500 e-minis rose 8 points, or 0.28 percent, with 149,660 contracts traded.
Nasdaq 100 e-minis were up 31 points, or 0.45 percent, on volume of 35,432 contracts.
“With the S&P at 23-and-a-half times trailing earnings, it’s a very rich multiple. You can have that rich a multiple only when rates are so low,” said Cecchini.
Of the 118 S&P 500 companies that have reported quarterly earnings through Thursday, 78.8 percent have topped expectations, versus an average of 72 percent over the previous four quarters.
Intel rose about 6 percent in premarket trading after the chipmaker gave a bullish forecast and blew past fourth-quarter expectations.
Honeywell was up marginally after its adjusted earnings narrowly beat estimates and the company raised its forecast for 2018 profit.
Starbucks fell 4.9 percent after it warned 2018 global cafe sales growth would be at the low end of its forecast.
Bed Bath & Beyond dipped 5 percent after JPMorgan downgraded to “underweight”.
Source: Brecorder.com
