(Reuters) – Major Wall Street indexes would open higher on Friday as investors bet on further official stimulus to fuel a post-pandemic economic revival, even as the COVID-19 cases saw yet another record increase in the country.
FILE PHOTO: Traders Wear Masks While Working on the Floor of the New York Stock Exchange as the Outbreak of Coronavirus Disease (COVID-19) Continues in the Manhattan District of New York, USA, May 27 2020. REUTERS / Lucas Jackson
BlackRock Inc, the world’s largest asset manager, rose 1.8% in pre-market trading after reporting a rise in quarterly earnings as investors invested money in their fixed income funds and management services of cash.
As the second quarter earnings season begins, investors are looking for clues on the recovery path for Corporate America. Unprecedented stimulus measures and improved economic data have helped the S&P 500 reach 5% of its all-time high in February.
Investors also expect more fiscal support, as a program offering additional unemployment benefits will expire on July 31. The United States Congress will return to Washington on Monday to fight for the next coronavirus aid bill.
“It is going to be very complicated in the next two weeks, as Republicans and Democrats come and go. I suspect they will end up settling in at a place closer to perhaps one and a half to two trillion in fiscal stimulus,” said David Bahnsen, chief investment officer of the Bahnsen Group, based in Newport Beach, California.
At 8:21 am ET, Dow’s e-minis rose 157 points, or 0.59%. S&P 500 e-minis were up 21.5 points, or 0.67%, and Nasdaq 100 e-minis were up 115.75 points, or 1.1%.
The S&P 500 and Dow have risen so far this week after promising data on a COVID-19 vaccine helped investors overcome a record surge in coronavirus cases in the United States.
The Nasdaq, by contrast, has fallen roughly 1.4% from last week’s record high when investors abandoned tech stocks and moved to cyclical sectors.
“These technology stocks are highly overvalued and the inevitable conversion of great technology into more value-oriented sectors is in the first entries. I expect a very tough patch for great technology for the rest of the year, ”said Bahnsen.
Netflix Inc lost 8.3% after it predicted subscriber growth during the coronavirus pandemic to slow even further than Wall Street expected during the third quarter.
United Airlines was up 0.9% as it said it had struck a deal with its pilots union on two different packages aimed at reducing involuntary permits in the fall and keeping pilots ready once demand hit by the coronavirus begins to recover.
Reports by Devik Jain and Medha Singh in Bangalore; Edited by Maju Samuel
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