Futures rise on earnings optimism, Disney climbs on transformation plan

(Reuters) – US stock index futures rose on Thursday as a string of strong quarterly gains lifted sentiment after worries that the Federal Reserve will keep interest rates higher for longer led to losses on Wall Street a day earlier.

Walt Disney Co rose 6.6% in premarket trading after beating earnings estimates and announcing it will cut 7,000 jobs to save $5.5 billion in expenses and make its streaming business profitable.

Casino stocks Wynn Resorts and MGM Resorts International each gained about 5% after releasing fourth-quarter results, with Wynn noting a significant return in visits and demand in Macau during the recent Chinese New Year holiday season.

PepsiCo Inc rose 1.4% as the beverage maker reported better-than-expected fourth-quarter results.

Tobacco company Philip Morris International Inc, drugmaker Abbvie Inc, apparel maker Ralph Lauren Corp and cereal maker Kellogg Co are all set to report earnings later in the day.

Of more than half of the S&P 500 companies that have reported fourth-quarter results so far, 69% have beaten analysts’ earnings estimates, according to data from Refinitiv IBES. In a typical quarter, 66% top estimates.

US equity indices got off to a positive start to the year, driven largely by hopes that the Federal Reserve is nearing the end of its rate-hike cycle and data showing economic resilience.

However, stock markets have faltered in recent days as Fed officials acknowledged slowing US inflation but said more rate hikes were on the cards amid signs the job market was still strong.

Data is expected to be released at 8:30 am ET as the number of Americans filing for unemployment benefits rose to 190.00 for the week ended February 4, after rising from 183.00 the previous week.

Megacap stocks including Meta Platforms, Apple Inc, Microsoft Corp, Google parent Alphabet, rose in the 1% to 2% range as U.S. Treasury yields continued to fall. [US/]

At 5:55 a.m. ET, the Dow e-minis are up 254 points, or 0.75%, the S&P 500 e-minis are up 37.25 points, or 0.9%, and the Nasdaq 100 e-minis are up 162.5 points, or 1.3%.

Tesla Inc firmed 3.7% as a U.S. safety panel said it found no evidence a Tesla Model S was operating on autopilot during a fatal crash in April 2021.

Salesforce Inc rose 1.6% after a source familiar with the matter told Reuters that hedge fund Third Point LLC owns a stake in the company.

(Reporting by Sruthi Shankar, Medha Singh and Johann M. Cherian in Bengaluru; Editing by Sriraj Kalluvila)


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