Stock Futures Extend Gains, Alphabet Jumps after Earnings

Stock futures rose Wednesday morning as investors mulled a fresh batch of earnings results from some major index components and tried to further shake off January’s volatility. Contracts on the S&P 500, Dow and Nasdaq rose sharply heading into market open. 

Shares of Alphabet (GOOGL) jumped more than 10% after the tech juggernaut topped quarterly sales and profit estimates and announced a 20-for-1 stock split. The move may make the stock currently trading at more than $3,000 per share more accessible and attractive to additional investors. Shares of other ad-driven internet technology companies including Meta (FB) and Pinterest (PINS) also gained in late trading following Alphabet’s earnings results. 

AMD (AMD) shares also soared after quarterly results beat estimates on nearly every major metric, suggesting it was taking more market share from chip competitors and navigating ongoing components shortages. Starbucks (SBUX) declined as quarterly profits missed estimates, however, and PayPal (PYPL) shares sank after delivering guidance that fell short compared to Wall Street’s expectations. 

This week’s slate of earnings results has helped provide a fresh catalyst to markets after a weak January performance. Results from other major companies including Meta, Spotify (SPOT) and Qualcomm (QCOMM) are due out on Wednesday. The S&P 500 closed out Tuesday’s regular trading day higher for a third straight session, kicking off February on a high note after posting its worst month since March 2020 in January. The Nasdaq Composite rose by 0.8% on Tuesday, while the Dow had gained 0.8%.

“We had a pretty rough January. I think we’re seeing a little bit of short covering and some bouncing here off the bottom. I don’t think the market’s settled yet,” Michael Vogelzang, CAPTRUST chief investment officer, told Yahoo Finance Live on Tuesday.

“We don’t quite know yet what the Fed’s going to be doing. We don’t have a good sense of the path of inflation for the rest of the year,” he added. “We have Russia hovering over the Ukrainian border … that has the potential to send oil prices up even higher than they already are, which of course could slow the economy down and drive inflation higher. So I think the market’s really unsettled, trying to find a bottom.” 

Source: YF