Wall Street set to open higher on robust healthcare earnings
(Reuters) – Wall Street was set to open higher on Tuesday, as stellar results from blue-chip companies including UnitedHealth and Johnson & Johnson lifted sentiment.
Investors are banking on the ongoing first-quarter earnings to fuel Wall Street’s rally this year from a late-2018 slump. The benchmark S&P index is just about 1% away from its closing record high hit in September.
UnitedHealth Group Inc rose 3% in premarket trading after the largest U.S. health insurer beat quarterly profit estimates and raised its adjusted earnings target for the year.
Rivals Anthem Inc and Cigna Corp rose about 1% each in light volumes.
Johnson & Johnson gained 1.7% after the U.S. healthcare conglomerate beat quarterly profit estimates and raised its adjusted sales growth forecast for the year.
“UnitedHealth and Johnson & Johnson raising their forecast is a hugely good thing as heading into the year we thought we might see an earnings pause or an earnings recession,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
“These companies who typically don’t want to have a pre-announcement saying they have to walk back on their earnings expectations, for them to raise guidance is really good.”
Bank earnings have been mixed so far.
Bank of America Corp fell 0.7% after revenue missed expectations in the first quarter but earnings still beat forecasts.
JPMorgan Chase & Co kicked off earnings for the group on a strong note on Friday, but Goldman Sachs Group Inc and Citigroup Inc disappointed on Monday with revenue misses.
Among big names reporting after markets close are Netflix Inc, up 2%, and International Business Machines Corp which gained 0.4%.
Analysts now expect S&P 500 companies to post a 2.1% year-on-year decline in profits, which would mark their first annual decline in earnings since 2016.
At 8:28 a.m. ET, Dow e-minis were up 173 points, or 0.66%. S&P 500 e-minis were up 10.75 points, or 0.37% and Nasdaq 100 e-minis were up 32.75 points, or 0.43%.
Among other earnings, J.B. Hunt Transport Services Inc fell 4.2% after the transport and logistics provider’s first-quarter profit and revenue fell short of estimates.
BlackRock Inc rose 1.6% after the world’s largest asset manager reported a better-than-expected first-quarter profit.
On the macro front, industrial production is expected to rise 0.2 percent in March following a 0.1% rise in February. The data is due at 9:15 a.m. ET.
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