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Futures gain as UnitedHealth, BofA rise on results

Randy Mancini 3 Jan 19
Traders work on the floor of the NYSE in New York City
A specialist trader works inside a booth on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 18, 2022. REUTERS/Brendan McDermid

January 19, 2022

By Shreyashi Sanyal

(Reuters) – Upbeat results from UnitedHealth and Bank of America pushed U.S. stock index futures higher on Wednesday, partially righting a wobbly start to the fourth-quarter earnings reporting season, while Big Tech stocks also looked set to make a comeback.

UnitedHealth Group Inc beat market estimates for quarterly profit on strong demand in its health insurance business. The Dow component’s shares rose 0.6% in premarket trading.

Bank of America Corp gained 1.8% after reporting a jump in fourth-quarter profit, benefiting from loan growth and a boom in global dealmaking activity.

“We’ve got some fresh earnings coming in and investors are looking ahead to those earnings and, for the moment, temporarily shrugging off concerns over higher inflation,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Most other big banks, however, commenced the fourth-quarter earnings season on a soft footing. JPMorgan Chase & Co, Citigroup and Goldman Sachs Group Inc reported disappointing results, knocking off the S&P 500 financial sector as well as the banks index from record highs.

Morgan Stanley rose 0.5% ahead of its quarterly showing, which will wrap up earnings from the big lenders.

Earnings from S&P 500 companies are expected to grow 23.1% year-over-year in the fourth quarter, according to IBES estimates from Refinitiv.

The Nasdaq index was a hair’s breadth away from confirming a 10% correction at close on Tuesday, having lost 9.7% from its Nov. 19 record closing high.

The index also closed below its 200-day moving average, a key technical support level, for the first time in almost two years, as the tech-heavy index has been pressured by a jump in benchmark U.S. Treasury yields. [US/]

Shares of beaten-down megacap growth companies, including Apple Inc, Microsoft Corp, Alphabet Inc, Tesla Inc, Meta Platforms Inc and Netflix Inc, rose up to 1%.

Investors now await next week’s Federal Reserve policy meeting for more cues on the central bank’s plan to control inflation. Data last week showed U.S. consumer prices increased strongly in December, adding up to the largest annual rise in inflation in nearly four decades.

At 7:00 a.m. ET, Dow e-minis were up 82 points, or 0.23%, S&P 500 e-minis were up 13.25 points, or 0.29%, and Nasdaq 100 e-minis were up 67 points, or 0.44%.

United Airlines rose 0.5% ahead of its fourth-quarter earnings after markets close. Last week, peer Delta Air Lines reported better-than-expected results.

(Reporting by Shreyashi Sanyal and Bansari Mayur Kamdar in Bengaluru; Editing by Maju Samuel and Saumyadeb Chakrabarty)