Stocks – U.S. Futures Higher, Tesla Helps; Dow Futures Up 105 Pts

(C) Reuters.

By Peter Nurse

Investing.com – U.S. stocks are set to open higher Thursday, helped by some strong corporate earnings and optimism over the next fiscal stimulus even as tensions with China rise.

At 07:05 AM ET (1105 GMT), S&P 500 Futures traded 12 points, or 0.4%, higher, Nasdaq Futures up 93 points, or 0.9%. The Dow Futures contract rose 105 points, or 0.4%.

The Dow Jones Industrial Average and the S&P 500 cash indexes are on course for their fourth positive week in a row, for the first time since November 2019 in Dow’s case and December 2019 for the S&P.

Senate Republicans late on Wednesday said they had come to agreement in principle over the majority of a potential aid package, which may be presented to their political opponents this week in an attempt to rush legislation through before the end of the month.

With some relief policies due to expire at the end of this month and Congress set for a recess in August, there have been fears that the policymakers won’t be able to resolve their differences in time.

Adding to the positive tone has been some strong earnings from investors’ darling Tesla (NASDAQ:TSLA) late Wednesday, which posted its fourth straight quarter with a profit. Tech giant Microsoft (NASDAQ:MSFT) also reported better-than-expected fiscal fourth-quarter earnings after hours, with overall revenue growing 13% in the quarter.

The earnings season will continue Thursday, with Southwest Airlines (NYSE:LUV), American Airlines (NASDAQ:AAL). Twitter (NYSE:TWTR) and AT&T (NYSE:T) before the bell and Intel (NASDAQ:INTC) due later.

Still, tensions remain fraught between the U.S. and China after the U.S. administration ordered Beijing to close its consulate in Houston.

Additionally, the number of U.S. deaths from Covid-19 rose by more than 1,100 for a second day in a row on Wednesday, including a record one-day rise in fatalities in Alabama, California, Nevada and Texas, according to a Reuters tally.

With those coronavirus numbers in mind, eyes will turn to the release of initial jobless claims data, at 08:30 AM ET (1230 GMT) to see if the new outbreak has halted the fall in claims.

Oil prices edged lower Thursday, with the jump in U.S. crude inventories, reported late Wednesday, having only a limited impact given the overall positive tone.

That said, these prices could see a correction in the near-term if a recovery in fuel demand slows further, especially in the United States, according to analysts at Barclays (LON:BARC), in a research note.

At 7:05 AM ET, U.S. crude futures traded 0.1% lower at $41.88 a barrel, while Brent fell 0.2% to $44.19.

Elsewhere, gold futures rose 0.8% to $1,879.55/oz, while EUR/USD traded at 1.1581, up 0.1%.