News Spotlights Stocks

Dow futures tick higher; earnings season comes into focus

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U.S. stock futures edged higher Monday at the start of a busy week for corporate earnings, while geopolitical tensions remain to the fore.

By 06:35 ET (10:35 GMT), the Dow Futures contract was up 115 points, or 0.3%, S&P 500 Futures traded 10 points, or 0.2%, higher and Nasdaq 100 Futures traded largely flat.

The main indices on Wall Street ended in a mixed fashion last week, with the 30-stock Dow Jones Industrial Average gaining 0.2%, while the benchmark S&P 500 lost 0.2% and the tech-heavy Nasdaq Composite dropped 0.6%.

Tension over Middle East escalation
Trading on Wall Street is likely to be choppy as investors fret about the potential for escalating violence in the Middle East.

U.S. Secretary of State Antony Blinken is set to return to Israel as part of a concerted diplomatic attempt to ensure Israel’s conflict with Palestinian militant group Hamas does not spillover elsewhere in the region as Israel prepares for a ground invasion of the Gaza region.

Iran, which backs Hamas, the dominant power in Gaza, has warned Israel of escalation if it kept attacking Palestinians.

Quarterly earnings season ramps up
The market received a boost on Friday after a slew of reports from major financial firms, including JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC), were generally well received.

This week sees the earnings season ramp up, with 11% of the S&P 500 slated to report, although Monday is a little short of major names, with Charles Schwab (NYSE:SCHW) the main report.

Continuing the banking theme, Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) are both due ahead of the open on Tuesday.

Other big names include healthcare giant Johnson & Johnson (NYSE:JNJ), reporting ahead of Tuesday’s market open, consumer products giant Procter & Gamble (NYSE:PG) ahead of Wednesday’s open, Netflix (NASDAQ:NFLX) and Tesla (NASDAQ:TSLA) after Wednesday’s close and Philip Morris (NYSE:PM) ahead of the open on Thursday.

Rite Aid (NYSE:RAD) will also be in the spotlight after the drugstore chain filed for Chapter 11 bankruptcy on Sunday.

September retail sales due on Tuesday
Monday’s main economic data release is the NY Empire State manufacturing index, but most eyes this week will be on Tuesday’s retail sales number for September, due on Tuesday, will give investors insight into the strength of consumer spending.

There are also a number of Fed officials due to speak this week, but most attention will be on comments by Fed Chair Jerome Powell on Thursday when he addresses the Economic Club of New York, just before the start of the central bank’s blackout period.

Crude consolidates after strong gains
Oil prices consolidated Monday after the previous week’s hefty gains, with all eyes on the tensions in the Middle East.

By 06:35 ET, the U.S. crude futures traded largely unchanged at $86.36 a barrel, while the Brent contract dropped 0.1% to $90.77.

Both benchmarks climbed nearly 6% on Friday, posting their highest daily percentage gains since April, and for the week, Brent advanced 7.5% while WTI climbed 5.9%.

Israel is not a big player in terms of crude production, but concerns are mounting about any potential escalation which could impact supplies from countries in the world’s top oil producing region, including Saudi Arabia, Iran and the United Arab Emirates.

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