(Reuters) – Wall Street was set to open higher on Tuesday, after a 2-percent fall in the prior session, boosted by some strong earnings and a bounce in certain bellwether stocks as investors wait for clues on the Federal Reserve’s path for future rate hikes.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 11, 2018. REUTERS/Brendan McDermid
While investors have baked in a fourth rate hike for the year on Wednesday, turbulence in the stock markets and a host of other worries have fueled calls, including from President Donald Trump, for the Fed to pause its tightening cycle or risk harming the U.S. economy.
Shares of banks, which are sensitive to interest rates, gained in premarket trading. JPMorgan Chase & Co (JPM.N) Citigroup Inc (C.N), Goldman Sachs Group Inc (GS.N) and Bank of America Corp (BAC.N) rose about 1 percent.
But it remains to be seen if the market’s gains hold. In what has been a turbulent month for U.S. stocks, the market has more often than not failed to build on an uptick in early trading.
“There is a lack of confidence in any upward move and we need something tangible to bring confidence into the market,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
“This has been a rather significant sell-off and before market stabilizes we need something tangible whether it’s a trade-deal or whether it’s something from the Fed.”
At 8:41 a.m. ET, Dow e-minis 1YMc1 were up 143 points, or 0.60 percent. S&P 500 e-minis ESc1 were up 16.5 points, or 0.65 percent and Nasdaq 100 e-minis NQc1 were up 51 points, or 0.79 percent.
The S&P 500 has tumbled 7.8 percent in December, its worst performance since 1931. (tmsnrt.rs/2A3z5ML)
Wall Street’s three main indexes are now in correction territory, a level reached when an index closes 10 percent below its record closing high. The small-cap Russell 2000 index confirmed a bear market on Wednesday, having fallen more than 20 percent from its Aug. 31 closing high.
Helping sentiment early in the day was Oracle Corp (ORCL.N). The business software maker rose 5.3 percent after forecasting strong current-quarter profit on growth in its cloud business.
Boeing Co (BA.N) gained for the first time in four days, rising 2.6 percent after increasing its dividend and share repurchase program.
Johnson & Johnson (JNJ.N) was up 0.5 percent, after falling nearly 13 percent in the past two days on a Reuters report that the company knew for decades that its Baby Powder contained cancer-causing asbestos.
Economic data was also slightly mixed. Data showed U.S. homebuilding rebounded in November on a surge in multi-family housing projects, but construction of single-family homes hit a 1-1/2-year low, pointing to a deepening housing market weakness that could spill over to the broader economy.
Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta