Here are five things you must know for Wednesday, Oct. 28:
1. -- Stock Futures Fall Sharply as Virus Cases Rise
Stock futures retreated sharply Wednesday as investors' worries grew about a rising number of coronavirus infections across the globe and the pandemic's impact on economic activity.
Contracts linked to the Dow Jones Industrial Average fell 499 points, S&P 500 futures sank 47 points and Nasdaq futures dropped 116 points.
Wall Street also was seeing increased volatility as the U.S. presidential election takes place in less than a week, and traders pretty much have given up on the hope that Congress will deliver a relief package to help the U.S. economy before Election Day.
As for the virus, confirmed cases across the globe approached 44 million and deaths from Covid-19, the disease caused by the coronavirus, were at 1.167 million, according to Johns Hopkins University. Deaths in the U.S. were more than 226,700. Hospitalizations from Covid-19 have risen at least 10% in the past week in 32 states and Washington, according to Bloomberg.
Stocks finished mixed Tuesday after Advanced Micro Devices' (AMD) - Get Report agreement to acquire chipmaking rival Xilinx (XLNX) - Get Report for $35 billion overshadowed a surge in coronavirus infections.
2. -- Microsoft Falls on Weak Revenue Guidance
Microsoft (MSFT) - Get Report was falling 2.07% in premarket trading Wednesday to $208.83 after the software giant reported fiscal first-quarter earnings and sales that topped estimates but issued a lukewarm second-quarter revenue forecast for some divisions.
The company reported fiscal first-quarter earnings on $1.82 a share on revenue of $37.2 billion. Analysts were calling for Microsoft to earn $1.55 a share on revenue of $35.76 billion.
Microsoft's Intelligent Cloud business - which includes the company's Azure cloud-computing offering - saw revenue increase 20% to $12.99 billion, topping expectations of $12.78 billion. The company's legacy personal computing business reported revenue of $11.85 billion, beating Wall Street estimates of $11.27 billion.
“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue generating $15.2 billion, up 31% year over year,” said Amy Hood, Microsoft's chief financial officer. “We continue to invest against the significant opportunity ahead of us to drive long-term growth.”
Microsoft said on a conference call Tuesday that it expects sales in the Intelligent Cloud unit of $13.55 billion to $13.8 billion, compared with analysts' estimates of $13.9 billion. Overall revenue for the period was forecast at $39.5 billion to $40.4 billion in the quarter, below Wall Street estimates of $40.5 billion.
"Bottom line, while the forecast came up a bit short, we do not believe it nearly enough to alter our longer-term view of the company or our investment thesis as we continue to view Microsoft as a key company behind every other companies' productivity," said Jim Cramer and the Action Alerts PLUS team, which holds Microsoft in its portfolio. "This is even more true now, as remote work is becoming more mainstream, work forces are more dispersed, and employees are increasingly required to build out home offices and connect to company-controlled databases."
3. -- Boeing and General Electric Report Earnings
Boeing (BA) - Get Report reported a third-quarter adjusted loss of $1.39 a share, narrower than estimates that called for a loss of $2.35. Revenue of $14.14 billion for the planemaker came in below forecasts of $14.2 billion.
United Parcel Service (UPS) - Get Report delivered third-quarter earnings that surpassed analysts' forecasts as consumers and businesses continued to turn to Big Brown to get their packages from point A to point B amid the coronavirus pandemic.
Earnings reports are also expected Wednesday from Mastercard (MA) - Get Report, General Dynamics (GD) - Get Report, Ford (F) - Get Report, Visa (V) - Get Report, Amgen (AMGN) - Get Report, Western Digital (WDC) - Get Report, eBay (EBAY) - Get Report, Etsy (ETSY) - Get Report, Fastly (FSLY) - Get Report, Gilead Sciences (GILD) - Get Report, ServiceNow (NOW) - Get Report and Pinterest (PINS) - Get Report.
The economic calendar in the U.S. Wednesday includes MBA Mortgage Applications for the week ended Oct. 23 at 7 a.m. ET, International Trade in Goods for September at 8:30 a.m. and Oil Inventories for the week ended Oct. 23 at 10:30 a.m.
4. -- Twitter, Facebook and Google CEOs Face Senate Grilling
Twitter (TWTR) - Get Report CEO Jack Dorsey, Facebook's (FB) - Get Report Mark Zuckerberg and Sundar Pichai of Alphabet's (GOOGL) - Get Report will face a grilling Wednesday from Republican senators who accuse the social media giants of showing an anti-conservative bias.
Republicans led by President Donald Trump have accused the companies of deliberately suppressing conservative, religious and anti-abortion views.
Dorsey, Zuckerberg and Pichai also are expected to argue for protection of an internet law that protects their sites from being held liable for content posted by their users.
The executives will appear via videoconference before the Senate Commerce Committee at 10 a.m. ET. They agreed to appear remotely after being threatened with subpoenas.
Dorsey, according to prepared remarks reported by Bloomberg, will call Section 230 of the Communications Decency Act “the internet’s most important law for free speech and safety."
“We should also be mindful that undermining Section 230 will result in far more removal of online speech and impose severe limitations on our collective ability to address harmful content and protect people online,” Dorsey plans to say.
Zuckerberg is expected to make a similar argument but does appear open to changing the law.
“Congress should update the law to make sure it’s working as intended,” he plans to say.
5. -- Los Angeles Dodgers Win the World Series
The Los Angeles Dodgers won the World Series for the first time since 1988, defeating the Tampa Bay Rays, 3–1, in Game 6 Tuesday night at Globe Life Field in Arlington, Texas.
It was the seventh World Series title in Dodgers franchise history.
The Dodgers' Corey Seager was named Most Valuable Player of the World Series after batting .400 with two homers, five RBIs and six walks against Tampa Bay.