U.S. futures gain as major firms report strong Q3 earnings

U.S. stock futures increased on Tuesday as major companies continued to report strong Q3 earnings. Notably, this eased concerns that persistent COVID-19 cases and increasing costs would derail corporate America’s profit rebound.

Futures linked to the Dow soared around 167 points or 0.5%. Meanwhile, S&P 500 futures rose 0.5% and Nasdaq 100 futures boosted 0.4%.

The Dow and the S&P 500 both sat around 1% from record highs.

Dow member Travelers witnessed its shares rise more than 3% in the premarket after the insurance firm’s quarterly earnings report exceeded expectations.

Fifth Third Bancorp shares increased after its profit and revenue topped Wall Street estimates.

Procter & Gamble reported better-than-anticipated earnings. However, its shares dropped more than 1% in premarket trading. The firm announced it is raising prices to cover increasing commodity and freight costs and warned that inflation may resume.

Johnson & Johnson also passed third-quarter earnings expectations by 25 cents per share but witnessed its shares drop in early morning trading.

Moreover, Walmart shares surged about 2% in the premarket after Goldman Sachs added the big-box retailer to its conviction buy list, stating the stock could rally around nearly 40%.

As of Tuesday, 82% of S&P 500 companies that have published earnings surpassed expectations. According to FactSet, considering those reports and estimates for those to come, third-quarter profit growth will come in at 30%.

Analysts are anticipating fourth-quarter subscriber guidance of 8.5 million for Netflix

 Three months ago, Netflix forecasted paid net subscriber adds of 3.5 million, while analysts anticipate around 3.84 million. Analysts are also anticipating fourth-quarter subscriber guidance of 8.5 million, which would be the highest outlook since Q1 of 2019.

Shares of Netflix were down on six of its last seven earnings releases.

Earnings from United Airlines should give investors a gauge on the travel rebound from the COVID-19 pandemic.

On October 18, the Nasdaq Composite and S&P 500 notched their 4th day of increases. The S&P 500 increased 0.34%. Meanwhile, the Nasdaq was the outperformer, rising 0.84% as Apple, Amazon, Facebook, Netflix, and Alphabet all closed higher. The Dow Jones Industrial Average (DJIA) fell 36 points, dragged down by a 3% decline in Disney’s stock.

Economic data from China reduced investor sentiment after reporting low GDP and industrial production for September that dropped short of expectations. According to the Fed, industrial production in America also declined for September as supply constraints resumed hindering manufacturing.

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