U.S. stocks looked set to test further record highs Friday as corporate earnings surprised to the upside and helped lift markets to their best start to a year in at least three decades.
Futures contracts tied to the Dow Jones Industrial Average gained around 100 points from their record close Thursday, indicating fresh all-time highs for the benchmark at the opening bell following stronger-than-expected fourth-quarter earnings reports from JPMorgan & Chase Co. (JPM) - Get Report and PNC Financial Services Group (PNC) - Get Report . Analysts are expecting the collective bottom line of S&P 500 companies to rise by around 10% over the quarter, with a focus on whether 2018 projections will be supported by last year's overhaul of the U.S. tax system.
Contracts tied to the broader S&P 500 were also marked higher, rising 5.75 points to extend gains for the broadest measure of U.S. stocks that is running at its best January pace since 1987.
Net income at JPMorgan, America's biggest bank, fell 37% to $4.23 billion, the company said but adjusted earnings per share of $1.76 topped the FactSet consensus of $1.69. Group revenue also hit $25.5 billion over the three months ended in December, against beating Wall Street estimates. JPMorgan shares, which slipped in the immediate minutes following the earnings release, pared those losses to trade essentially unchanged from Thursday's close of $110.84.
Facebook Inc. (FB) - Get Report was another active mover and may fall the most in more than a year at the opening bell, according to premarket trading, after the social media icon said it would re-tool its news feed to direct more content from the families and friends of its 2 billion monthly active users.
Facebook shares fell 4.14% from their Thursday close in premarket trading, indicating an opening bell price of $179.00, a move that would trim their three-month gain to 3.6% compared to a 9.2% advance for the benchmark Nasdaq Composite over the same period. The stock hasn't fallen more than 4.5% since Nov. 3, 2016.
The dollar index, which benchmarks the greenback against six of its global peers, was marked 0.5% lower at 91.38, the lowest since August, as investors calibrated the impact of yesterday's sharp rally in U.S. Treasury bonds following China's dismissal of a report that they may stop adding their 1.189 trillion holdings as "fake news."
Benchmark 10-year yields were marked at 2.55% at the start of European trading after touching a 10-month high of 2.592% on Wednesday while yields for German bunds rose to a multi-month high of 0.532% as the euro gained on the back of the ECB minutes published yesterday.
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In commodity markets, global oil prices eased from their three-year peaks after customs data from China showed that imports slowed to 33.7 million barrels over the month of December, down 4 million from the previous month to an average of around just under 8 million barrels per day.
Brent crude contracts for March delivery were seen 26 cents lower from their New York close at $68.99 per barrel while West Texas Intermediate crude contracts for the same month were changing hands 0.7% lower at $63.20 per barrel.
In Europe, the Stoxx 600 benchmark, the region's broadest measure of share prices, rose 0.17% in the opening two hours of trading, snapping a two-day losing streak as global markets rebounded following last night's 200-point rally on Wall Street.
Gains were limited, however, by the euro's rise to a near three-year high of 1.2128 after minutes from the European Central Bank's December policy meeting indicated a desire to flag earlier rate increases and the economy recovers and reports indicated a breakthrough in talks to form a coalition government in Germany.
Overnight in Asia, stocks rose for the first day in three despite a still-sagging U.S. dollar and slightly slower-than-expected import data from China, the world's second-largest economy. The region-wide MSCI Asia ex-Japan index was marked 0.58% higher in the close of the final session of the week while a strong yen, which hit a six week high of 1.1105 against the dollar, held down export and internationally-focused stocks and pushed the Nikkei 225 0.24% lower to close at 23,653.82 points.