US pre-open: Futures point higher on upbeat earnings


LONDON (ShareCast) - US stock futures were pointing to small gains when markets open on Friday as markets react to a host of better-than-expected earnings reports from a number of blue chips.

Wall Street's three main benchmark indices are expected to open around 0.3-0.5% higher after the opening bell rings, with the S&P 500 looking to set fresh all-time highs. The index finished at its highest ever close of 1,733.15 on Thursday night as analysts attempted to predict how the recent political uncertainty on Capitol Hill will affect the outlook for monetary policy.

As the dust begins to settle following the last-minute deal on Wednesday to extend the debt ceiling and reopen the US government, markets are hoping that the Federal Reserve could delay tapering stimulus until early 2014, given that the shutdown is likely to have dampened growth in the fourth quarter.

Chief Analyst Allan von Mehren from Danske Bank (Other OTC: DNSKY - news) said that the central bank will likely begin to taper at its meeting at the end of January. "The Fed likely needs to see the recovery on a stronger footing before it will start to taper. Hence hard data on private consumption, capex and job growth should improve in order for the Fed to move," he said.

Investors are now looking ahead to the delayed release of the September US employment report next Tuesday, which will be key factor in the Fed's next move.

Google (NasdaqGS: GOOG - news) 's share price is set to open at a record high after the open bell after reporting third-quarter results last night that beat expectations. The internet giant reported adjusted earnings of $10.74 a share on sales of $11.92bn in the quarter, ahead of consensus forecasts for $10.36 and $11.7bn, respectively, helped by strong growth in advertising.

Banking heavyweight Morgan Stanley (Xetra: 885836 - news) swung to a better-than-expected profit in the third quarter, reporting a net income of $906m, up from a loss of $1.02bn the year before.

US conglomerate General Electric (Other OTC: GEAPP - news) was also higher in pre-market trade after adjusted earnings totalled 40 cents a share in the third quarter, ahead of the 35 cents estimate.

Chipotle Mexican Grill (NYSE: CMG - news) , Align Technology (NasdaqGS: ALGN - news) , Paker-Hannifin and Baker Hughes were also making gains ahead of the bell after their earnings reports, while AMD (NYSE: AMD - news) , Textron (NYSE: TXT - news) and SunTrust headed lower.


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