Here are five things you must know for Wednesday, Feb. 3:
1. -- Stock Futures Fluctuate After Amazon and Alphabet Earnings
Stock futures fluctuated Wednesday but Nasdaq futures rose after tech giants Amazon.com (AMZN) - Get Amazon.com, Inc. Report and Alphabet (GOOGL) - Get Alphabet Inc. Class A Report posted strong earnings that impressed investors.
Contracts linked to the Dow Jones Industrial Average fell 12 points, S&P 500 futures gained 19 points and Nasdaq futures were up 74 points. Stocks finished sharply higher on Tuesday.
The retail frenzy in stocks such as GameStop (GME) - Get GameStop Corp. Class A Report and AMC Entertainment (AMC) - Get AMC Entertainment Holdings, Inc. Report subsided further. Shares of GameStop, the video game retailer, were rising slightly in premarket trading Wednesday after falling 60% in the previous session.
Treasury Secretary Janet Yellen has summoned officials from the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission to discuss the recent market volatility driven by retail trading in stocks like GameStop.
President Joe Biden's $1.9 trillion stimulus package, meanwhile, was being pushed through by Democrats without Republican support.
2. -- Amazon's Earnings Smash Estimates and Jeff Bezos Steps Down
Shares of Amazon were up slightly in premarket trading after the company reported quarterly sales of more than $100 billion for the first time and founder Jeff Bezos said he will step down as CEO during the third quarter.
Andy Jassy, the head of Amazon’s cloud computing division, will take over day-to-day control of Amazon. Bezos will become executive chairman.
“Right now I see Amazon at its most inventive ever, making it an optimal time for this transition,” said Bezos in a statement.
"Amazon will miss the leadership of an entrepreneurial icon like Bezos, but we have the upmost confidence in Jassy and this change in leadership," said Jim Cramer and the Action Alerts PLUS team, which holds Amazon in its portfolio.
Amazon announced the transition Tuesday at the same time it posted fourth-quarter earnings of $7.2 billion, or $14.09 a share, that smashed analysts' forecasts and revenue of $125.55 billion that beat estimates of $119.72 billion. Earnings set a record for the third consecutive quarter.
Amazon said it expects sales in the fiscal first quarter of $100 billion to $106 billion, up from $75.45 billion in the first quarter of 2019.
The stock rose 0.21% to $3,387.01 in premarket trading.
3. -- Alphabet Surges as Quarterly Ad Revenue Soars to $46 Billion
Alphabet shares stormed higher Wednesday after the parent company of Google reported fourth-quarter earnings that easily topped Wall Street estimates.
The stock gained 7.45% to $2,062.05 in premarket trading Wednesday.
Earnings were $22.30 a share vs. year-earlier profit of $15.35. Revenue minus traffic-acquisition costs was $46.43 billion, up from $46.08 billion a year earlier.
Wall Street had been expecting earnings of $15.77 a share on revenue of $43.85 billion.
“Our strong results this quarter reflect the helpfulness of our
products and services to people and businesses, as well as the accelerating transition to online services and the cloud,” said Alphabet CEO Sundar Pichai.
Advertising revenue in the quarter was $46.2 billion - YouTube's ad sales rose 46% to $6.9 billion. The company's search segment saw sales jump 17% to $31.9 billion.
Google’s Cloud revenue soared 47% to $3.83 billion.
"Overall, it was once again an incredibly strong quarter from Alphabet," said Jim Cramer and the Action Alerts PLUS team, which holds Alphabet in its portfolio.
4. -- Wednesday's Calendar: AbbVie and PayPal Earnings, ADP Jobs Report
Earnings reports are expected Wednesday from AbbVie (ABBV) - Get AbbVie, Inc. Report, eBay (EBAY) - Get eBay Inc. Report, PayPal (PYPL) - Get PayPal Holdings Inc Report, Spotify (SPOT) - Get Spotify Technology SA Report, MetLife (MET) - Get MetLife, Inc. (MET) Report, IAC/InterActiveCorp (IAC) - Get IAC/InterActiveCorp. Report, Apollo Global Management (APO) - Get Apollo Global Management Inc. Class A Report, Spirit Airlines (SAVE) - Get Spirit Airlines, Inc. Report, e.l.f. Beauty (ELF) - Get e.l.f. Beauty, Inc. Report, Biogen (BIIB) - Get Biogen Inc. Report, Yum China (YUMC) - Get Yum China Holdings, Inc. Report, Humana (HUM) - Get Humana Inc. (HUM) Report, Qualcomm (QCOM) - Get QUALCOMM Incorporated Report and Qorvo (QRVO) - Get Qorvo, Inc. Report.
The U.S. economic calendar for Wednesday includes the ADP National Employment Report for January at 8:15 a.m. ET, the PMI Composite Final for January at 9:45 a.m., the ISM Services Index for January at 10 a.m. and Oil Inventories for the week ended Jan. 29 at 10:30 a.m.
5. -- SpaceX's Starship Prototype Rocket Explodes
A SpaceX prototype rocket launched successfully Tuesday but crashed upon landing and the Federal Aviation Administration said it would oversee an investigation.
The rocket prototype was expected to take off last week but remained grounded because SpaceX violated a public safety agreement it had with federal regulators during a previous test launch, according to the FAA, CNN reported.
"The FAA's top priority in regulating commercial space transportation is ensuring that operations are safe, even if there is an anomaly," an FAA spokesperson said in a statement. "The FAA will oversee the investigation of (Tuesday's) landing mishap involving the SpaceX Starship SN9 prototype in Boca Chica, Texas. Although this was an uncrewed test flight, the investigation will identify the root cause of today's mishap and possible opportunities to further enhance safety as the program develops."
The Starship SN-9 was an early prototype for a rocket that SpaceX hopes will carry the first humans to Mars.