Futures edge higher on upbeat earnings

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© Reuters. Traders work on the floor at the NYSE in New York© Reuters. Traders work on the floor at the NYSE in New York

By Shreyashi Sanyal

(Reuters) – The S&P 500 and Nasdaq were set to open higher on Tuesday after a batch of upbeat earnings reports eased concerns over domestic growth and the fallout from the U.S.-China trade war, but weak results from McDonald’s looked set to weigh on the index.

The benchmark S&P 500 index () closed above 3,000 points in the previous session, just shy of its record high hit in July, as investors cheered signs of progress toward a resolution of the bitter spat between the world’s two biggest economies.

Strong corporate earnings since last week have provided some respite to equity markets, which were rattled over the past few months by geopolitical worries and a slowing global economy.

“It’s been a pretty good season so far, but I always caution people the early announcers have a tendency to be better than the later ones, so those numbers come down throughout the season,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:) in Austin, Texas.

Procter & Gamble Co (N:) gained 4.3% in premarket trading after raising full-year forecasts and beating Wall Street estimates.

Harley-Davidson Inc (N:) jumped 7.1% as it beat quarterly profit expectations, while United Technologies Corp (N:) gained 1.8% on a forecast raise.

However, early market action showed a slight decline in Dow e-minis <1YMcv1> as McDonald’s Corp (N:) slipped 3.3% after missing Wall Street expectations for quarterly sales at its established U.S. outlets.

Another Dow component, Travelers Companies Inc (N:) fell 4% after the property and casualty insurer fell short of quarterly profit expectation.

Of the 75 S&P 500 companies that have reported results by Monday, over 80% had topped Street estimates. Still, analysts expect the first earnings contraction since 2016 in the backdrop of a slowing domestic economy and the trade war.

The threat of tariffs on toys imported from China hit toymaker Hasbro Inc’s (O:) quarterly profit as shipping and warehousing costs soared. Its shares tumbled 13.8% before the bell.

At 8:33 a.m. ET, were down 17 points, or 0.06%. were up 4.25 points, or 0.14% and were up 28 points, or 0.35%.

Among other stocks, Biogen Inc (O:) surged nearly 37% after the drugmaker announced a surprise plan to file for U.S. regulatory approval for its Alzheimer’s treatment.

Bristol-Myers Squibb Co (N:) was trading 4.8% higher on positive data from a late-stage lung cancer trial. Shares of rival Merck & Co Inc (N:) slipped 2.7%.

Homebuilder PulteGroup Inc (N:) rose 1.5% after reporting better-than-expected third-quarter profit and revenue as lower mortgage rates boosted demand.

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