Stock index futures rose on Wednesday as continued strong earnings, including from Apple Inc
Equities have struggled against a number of headwinds recently, including weak data on the U.S. labor market and concerns about sovereign debt problems in the United States and Europe. On Tuesday, however, strong results from such bellwethers as International Business Machines Corp
Just about everyone who has reported results has beaten expectations, and that's enough to offset the global macro headwinds that are out there, said Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
This market is all about earnings, and its relieving the concerns out there about the temporary weakness in the economy and about valuation.
Tech giant Apple reported after Tuesday's close that it posted third-quarter revenue that was far above expectations, helped by blockbuster sales of its iPhone and its Asian business. The stock gained 5.9 percent to $398.98 in premarket trading.
Among the early reporting companies on Wednesday was Dow component United Technologies Inc
Shares of Textron rose 2.8 percent to $22.75 before the bell while United Tech was up 1.6 percent to $90.25.
Apart from earnings, AMR Corp
Also, Ecolab Co
S&P 500 futures rose 7.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 62 points and Nasdaq 100 futures rose 21.5 points.
Among the many companies still due to report earnings on Wednesday are American Express Co
Investors will also be looking at June existing home sales data, which are due 10:00 EDT and are seen rising from the previous month. On Tuesday, housing starts that were much stronger than expected contributed to the market's positive tone.
The growing optimism over earnings season comes as market participants also gain more confidence in the talks for a debt deal in the United States. Markets gained momentum late in the day on Tuesday after President Barack Obama suggested progress was being made toward a $3.75 trillion deficit reduction deal centered around entitlement reform.
The White House and Congress need an agreement that includes an increase in the federal debt ceiling by August 2 or the United States could default on its debt.
Obama's comments, along with the earnings, sparked a sharp equity rally on Tuesday, with all indexes rising more than 1.6 percent and the Nasdaq climbing more than 2 percent.
(Editing by Chizu Nomiyama)