Here are five things you must know for Thursday, Oct. 24:
1. -- Stock Futures Rise Ahead of Busiest Earnings Day
U.S. stock futures were slightly higher Thursday as Wall Street prepared for the busiest day of the third-quarter earnings season.
Contracts tied to the Dow Jones Industrial Average rose 31 points, futures for the S&P 500 gained 4 points, and Nasdaq futures were up 36.50 points.
A focus for investors this earnings season has been how much the U.S. trade war with China has impacted profits. Caterpillar (CAT) - Get Report , for instance, on Wednesday said sales declined in both the U.S. and China but added it wasn't being hurt as badly as expected by the trade tensions.
"With the U.S.-China trade talks quiet for now, U.S. earnings have driven volatility and market direction this week," said Jeffrey Halley of Oanda.
Stocks rose Wednesday in choppy trading as the Dow Jones Industrial Average pared earlier gains but still got a boost from Boeing (BA) - Get Report and Caterpillar, while Texas Instruments' (TXN) - Get Report earnings miss pulled down the chip sector.
The economic calendar in the U.S. Thursday includes Durable Goods Orders for September at 8:30 a.m. ET, weekly Jobless Claims at 8:30 a.m., PMI Composite FLASH for October at 9:45 a.m., and New Home Sales for September at 10 a.m.
2. -- Microsoft Rises Modestly Despite Big Earnings Beat
Microsoft (MSFT) - Get Report posted fiscal first-quarter profit of $1.38 a share on revenue of $33.1 billion, beating analysts' estimates and sending the stock up 1% to $138.55 in premarket trading Thursday.
Wall Street was expecting earnings of $1.24 a share on revenue of $32.15 billion.
Microsoft's "Intelligent Cloud" segment posted revenue of $10.8 billion, beating analysts' estimates of $10.42 billion. The company's Azure cloud service segment reported a 59% increase in revenue.
"The world's leading companies are choosing our cloud to build their digital capability," said CEO Satya Nadella. "We are accelerating our innovation across the entire tech stack to deliver new value for customers and investing in large and growing markets with expansive opportunity."
Revenue at Microsoft's legacy personal-computer business was $11.1 billion vs. expectations of $10.9 billion.
Microsoft said it expects fiscal second-quarter revenue of $35.15 billion to $35.95 billion. Analysts forecast $35.91 billion.
" ... we think the quarter and guidance was strong enough to take this stock back to its all-time highs and perhaps even further off the long-term strength of Azure, which remains the dominant hybrid cloud ecosystem," said Jim Cramer and the Action Alerts PLUS team, which holds Microsoft in its portfolio. "We continue to believe that it will gain market share as businesses around the world increasingly shift toward cloud computing, with a clear preference for a hybrid-cloud environment, the best of which is Azure."
3. -- Tesla Soars After Posting Surprise Third-Quarter Profit
Tesla (TSLA) - Get Report , the electric vehicle maker, was jumping more than 18% in premarket trading Thursday after posting an adjusted profit in the third quarter of $1.91 a share vs. analysts' estimates that called for a loss of 46 cents.
Earnings in the quarter were $143 million, or 80 cents a share, compared with $311 million, or $1.82 a share, a year earlier.
Revenue of $6.3 billion declined from $6.82 billion in the same period last year and came in under forecasts of $6.43 billion. Free cash flow was $371 million, beating estimates of $32 million.
Tesla reported a gross margin in the quarter of 18.9%, beating estimates of 15.8%.
"Despite reductions in the average selling price (ASP) of Model 3 as global mix stabilizes, our gross margins have strengthened. Additionally, operating expenses are at the lowest level since Model 3 production started." Tesla said. "As a result, we returned to GAAP profitability in Q3 while generating positive free cash flow. This was possible by removing substantial cost from our business."
"Last year, our story was about ramping the Model 3. While total volumes are expected to grow by approximately 50% in 2019, this year our focus has been cost control and preparing for our next phase of growth," the company added.
Tesla said it delivered 97,186 units in the quarter, topping estimates of 97,000.
On a conference call, Tesla executives said the company's gigafactory in China and production of its next vehicle, Model Y, were ahead of schedule.
Tesla shares rose 18.38% to $301.50 in premarket trading.
4. -- Ford Sees 'Fourth-Quarter Headwinds,' Cuts 2019 Guidance
Ford said it expects adjusted earnings of $1.20 to $1.32 a share vs. Wall Street forecasts of $1.26 a share. The company previously said it expected earnings of as high as $1.35.
Ford also said it expects adjusted operating profit for the year in the range of $6.5 billion to $7 billion; it previously said operating profit would be $7 billion to $7.5 billion.
The company said it trimmed its forecast because "fourth-quarter headwinds - higher warranty costs, higher than planned incentives in North America, and lower volumes in China - have intensified since Ford last gave financial guidance for 2019."
Ford reported adjusted earnings in the third quarter of 34 cents a share, higher than forecasts of 26 cents.
Net income in the period was $425 million, or 11 cents a share, compared with $991 million, or 25 cents a share, a year earlier. Revenue fell to $36.99 billion in the period but topped analysts' expectations of $36.87 billion.
Ford said operating profit in North America during the third quarter was more than $2 billion but its China division posted a loss of $281 million.
5. -- Amazon, Intel, 3M and Visa Report Earnings Thursday
Earnings reports are also expected Thursday from Amazon.com (AMZN) - Get Report , Intel (INTC) - Get Report , Visa (V) - Get Report , Comcast (CMCSA) - Get Report , Raytheon (RTN) - Get Report , American Airlines (AAL) - Get Report , Southwest Airlines (LUV) - Get Report , T-Mobile (TMUS) - Get Report , Twitter (TWTR) - Get Report , Northrop Grumman (NOC) - Get Report and Dow Inc. (DOW) - Get Report .
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