Here are five things you must know for Wednesday, Oct. 31:
1. -- Stocks Rise as a Brutal October Comes to a Close
U.S. stock futures were rising on Wednesday, Oct. 31, suggesting Wall Street would extend the previous session's solid gains through the final day of October, a month that has seen the S&P 500 fall 7.91% and come close to "correcting" from the all-time high it reached on Sept. 20.
Contracts tied to the Dow Jones Industrial Average gained 162 points, futures for the S&P 500 rose 19 points, and Nasdaq futures were up 72 points.
Stocks ended sharply higher on Tuesday, Oct. 30, with the Dow jumping 431 points, or 1.77%, to 24,874. The S&P 500 gained 1.57%, and the Nasdaq rose 1.58%. The gains Tuesday lifted the Dow and S&P 500 back into the green for 2018.
Global stocks on Wednesday also posted gains. They too were on track to close out one of the worst months since the financial crisis, with investors cautiously moving cash into beaten-down equities that are trading at their cheapest levels in more than two years even as headline risks related to U.S.-China trade, rising interest rates, and weakening corporate earnings continue to challenge sentiment.
The economic calendar in the U.S. on Wednesday includes the ADP National Employment Report for October at 8:15 a.m. ET, the Employment Cost Index for the third quarter at 8:30 a.m., Chicago PMI for October at 9:45 a.m., and Oil Inventories for the week ended Oct. 26 at 10:30 a.m.
2. -- Facebook's Earnings Top Wall Street Forecasts
Facebook Inc. (FB) rose 4.9% in premarket trading on Wednesday after the social media giant posted third-quarter earnings that topped forecasts but revenue that missed.
Facebook earned $1.76 a share in the quarter, up from $1.59 a year earlier and higher than analysts' estimates of $1.46 a share. Revenue was $13.73 billion while analysts predicted $13.77 billion.
In July, Facebook forecast its annual revenue growth rate, which was 42% in the second quarter, would drop by a high-single digit percentage sequentially in both the third and fourth quarters. However, after revenue growth dropped by 9 percentage points in the third quarter, Facebook said it now forecasts growth will drop by a mid-to-high single-digit percentage in the fourth quarter.
That's not exactly a major guidance revision, wrote TheStreet's Eric Jhonsa, but with pre-earnings expectations having been pretty low, the outlook was well-received by investors.
"Bottom line, we believe the quarter to have been highly encouraging as management reaffirmed its positive outlook on the potential to monetize Stories and other growth initiatives such as Instagram and video content, while calling out a continued interest in pursuing augmented/virtual reality initiatives such as the Oculus platform," wrote Jim Cramer and the Action Alerts PLUS team, which holds Facebook in the AAP Charitable Trust Portfolio.
3. -- GM, Sprint and Yum! Are Highlights of Wednesday's Earnings Calendar
General Motors Co. (GM) reported third-quarter adjusted earnings of $1.87 a share, smashing estimates of $1.25. Revenue at the carmaker rose 6% to $35.8 billion and came in higher than forecasts of $35.3 billion.
GM said it expects 2018 adjusted earnings of $5.80 to $6.20 a share. Analysts expect $5.86. The stock jumped 10% in premarket trading.
Yum! Brands Inc. (YUM) posted third-quarter adjusted earnings of $1.04 a share, beating analysts' estimates of 84 cents. Revenue of $1.39 billion also topped forecasts. Yum! rose 3% in premarket trading.
Clorox Co. (CLX) posted fiscal first-quarter earnings of $1.62 a share, 4 cents better than estimates. The company also reduced its earnings guidance for fiscal 2019. The stock fell 6% in premarket trading.
Estee Lauder Cos. (EL) earned $1.47 a share on an adjusted basis in its fiscal first quarter, beating estimates of $1.22. Revenue rose to $3.52 and topped forecasts of $3.47 billion. The company also raised its quarterly dividend to 43 cents a share from 38 cents. Shares rose 4.6%.
Sprint Corp. (S) earned 5 cents in its fiscal second quarter, beating analysts' forecasts that called for a loss of 1 cent. Revenue of $8.43 billion beat estimates of $7.97 billion.
4. -- eBay Jumps After Earnings Beat Estimates
Shares of eBay Inc. (EBAY) rose 6.9% in premarket trading after the online retailer reported third-quarter adjusted earnings of 56 cents a share, beating expectations by 2 cents.
Revenue of $2.65 billion matched analysts' forecasts.
"This quarter we continued to make foundational investments to improve the long-term competitiveness of our marketplace while setting the stage for significant growth opportunities," said Devin Wenig, eBay's president and CEO. "We will continue to innovate the customer experience while executing our growth initiatives in payments and advertising to position eBay for future success."
The company said it expects adjusted earnings in the fourth quarter of 67 cents to 69 cents a share on sales of $2.85 billion to $2.89 billion. Analysts were calling for adjusted profit of 67 cents a share on revenue of $2.89 billion.
5. -- Ford and Baidu to Test Self-Driving Cars in China
The project will start testing on roads in Beijing by the end of this year, and possibly other Chinese cities, the two companies said.
Separately, Baidu, the Chinese internet company, said its third-quarter profit rose 56% from a year earlier.
Meanwhile, Alphabet Inc.'s (GOOGL) Waymo has been granted the first permit in California to begin driverless testing on public roads.
"It's the first time that California has allowed tests on public roads of fully driverless cars - that is, without a test driver sitting in the driver's seat," said the company in a statement.
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