Here are the most important news, trends and analysis that investors need to start their trading day:
Nasdaq futures bounced nearly 2% on Thursday, boosted by a 14% pop in shares of Facebook parent Meta Platforms on better-than-expected earnings. Bond yields rose as data showed U.S. economic growth declined in the first quarter. After the bell Thursday, megatech continues to lead U.S. companies out with quarterly results as Apple and Amazon are scheduled to report.
- The tech-heavy index, already in a bear market, closed Wednesday at its low for the year, one day after its worst single-session sell-off since September 2020.
- The Dow Jones Industrial Average and the S&P 500 were both set to open higher Thursday after ending the prior session with modest gains. The S&P 500 was still in a correction.
- The Dow was just under the correction threshold of down 10% or more from recent highs.
A couple of premarket movers: Teladoc cratered 44% after reporting an earnings miss; Southwest Airlines rose more than 4% after delivering an optimistic outlook; and Ford rose 1.5% after slightly beating expectations with earnings and revenue.
The benchmark 10-year Treasury yield on Thursday rose, trading around 2.88%, after the government reported that the U.S. economy contracted 1.4% in the first quarter. Economists were expecting growth of 1%. Initial jobless claims for the week ended April 23 were 180,000, matching estimates. The Federal Reserve will pay special attention the reports as it looks for a sweet spot to aggressively hike interest rates further to fight inflation without shutting the door on economic growth.
Meta Platforms, formerly named Facebook, reported mixed first-quarter results after the closing bell Wednesday. However, while revenue missed, key engagement metrics came in better than expected and so did earnings. During the call, management provided highly encouraging commentary on expenses, monetization and longer-term profit potential. They said they also expect revenue growth to reaccelerate over time. Despite soaring to around $199 per share in the premarket, such a level would still keep Meta Platforms' down more than 40% for the year.
Twitter issued earnings for the first quarter before the opening bell Thursday, in what could be one of its last reports as a public company after the social media network's board agreed to sell to Elon Musk for $44 billion. Twitter shares rose 1% to around $49 each in the premarket but that's below Musk's $54.20 per share cash cash offer. Twitter said monetizable daily active users beat estimates in the first quarter but overall revenue was slight below expectations.
Two out of three Dow components reporting quarterly earnings Thursday morning saw their stocks rise in premarket trading.
- McDonald's was set to open 2% higher after delivering better-than-expected revenue, fueled by price hikes in the U.S. and strong international sales growth.
- Caterpillar was set to open 2% lower despite beating on earnings and revenue, with help from increased construction activity and rising commodity prices leading to more mining.
- Merck was set to open up around 2% after beating on the top and bottom lines, helped by strength in its cancer treatment Keytruda, its HPV vaccine Gardasil and its Covid oral antiviral Molnupiravir.
Eli Lilly shares jumped 4% in Thursday's premarket, shortly after releasing promising data from a 72-week trial of its obesity drug tirzepatide. Participants lost up to 22.5% of their body weight, or about 52 pounds. Sixty-three percent of participants taking tirzepatide achieved at least 20% body weight reductions. Also before the bell Thursday, Lilly reported better-than-expected quarterly earnings and revenue. The drugmaker lowered full-year earnings guidance but raised its outlook for revenue.