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US pre-open: Stocks seen flat as Morgan Stanley, BNY Mellon report
US futures pointed to a muted open on Wall Street on Thursday as investors digested more bank earnings, with Morgan Stanley and Bank of New York Mellon both reporting.
At 1240 GMT, Dow Jones Industrial Average and S&P 500 futures were up 0.1% to 26,123.00 and 2,805.75, respectively, while Nasdaq futures were down 0.1% to 6,819.75. On Wednesday, stocks ended higher, with the Dow closing above the 26,000 mark for the first time, following earnings from Bank of America and Goldman Sachs.
GKFX analyst David Morrison said: "It's shaping up to be a flat start for US equities with the futures markets little changed. Investors appear to be catching their breath following yet another record close yesterday for the US majors. Apple helped to goose the market after it announced it would be making a $350bn 'contribution' to the US economy over the next five years, mostly as a result of Trump's tax reforms.
"The bullishness held despite another pick-up in US Treasury yields which sees the 10-year hovering around 2.6%. But attention continues to be focused on corporate earnings which have had a strong start, despite some mixed results from the banking sector."
He added: "Even the most cursory look at charts of the US majors shows the explosive move higher since the beginning of the month. Even the wobble earlier this week was completely erased by yesterday's price action. Obviously the big question is just how much further can this rally go? The answer is that for now, every piece of market news or economic data is used to justify further buying. One day that will change and the resulting sell-off will be ugly. But it's impossible to forecast when that time will come, even if reduced monetary stimulus may prove to be the trigger."
Banks were still firmly in focus, with Morgan Stanley up in pre-market trade after its quarterly earnings beat expectations despite a hit to trading revenues. The bank posted adjusted earnings of $0.84 a share versus expectations of $0.77.
Bank of New York Mellon was in the spotlight as it posted a 37% jump in fourth-quarter profit and recorded an estimated net benefit of $427m from the new US tax system.
Aluminium giant Alcoa was set to slide at the open after its fourth-quarter net loss widened to $1.06 a share from $0.68 the year before, mainly due to the closure and sale of some of its smelting assets.
Technology giant Apple could still be active a day after it announced plans to repatriate billions in overseas cash, while GNC Holdings looked set to surge at the open after the vitamin retailer's profit outlook surpassed analysts' expectations.
Elsewhere, La Quinta Holdings rallied as it agreed for hotel operator Wyndham WorldWide to buy its hotel franchise and management business for $1.95bn in cash.
Still to come, IBM and American Express are slated to report after the markets close.
On the data front, housing starts, initial jobless claims and the Philadelphia Fed manufacturing survey are all due at 1330 GMT.