Mixed Earnings Won’t Stop S&P 500 Juggernaut: Stock Futures Rise, Strategist Sees Broader Rally With Easing Concentration Risk

U.S. stock futures were firmer early Friday as they defiantly held onto the upward momentum amid trade deal optimism and earnings hopes.

Intel (INTC) stock slumped over 4.50% in extended trading following the struggling chipmaker’s quarterly results.

As of 12:40 a.m. ET, on Friday, the Dow, S&P 500, and Nasdaq 100 futures were all up about 0.20%, while the Russell 2000 Index rose over 0.40%.

On Thursday, the major averages closed on a mixed note, with a fall in weekly jobless claims and some positive earnings reports helping the S&P 500 Index and the Nasdaq Composite Index stay afloat. At the same time, company-specific catalysts dragged the 30-stock Dow Jones Industrial Average.

The S&P 500 and the Nasdaq Composite set new highs for the day, with the broader gauge notching its fourth straight closing high.

Adverse reactions to earnings from IBM (IBM) and Honeywell (HON), as well as a Department of Justice (DOJ) probe into UnitedHealth’s (UNH) Medicare practices, weighed on the Dow. 

The Invesco QQQ Trust (QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, gained 0.21%, while the SPDR S&P 500 ETF (SPY) edged up 0.03%. 

On the other hand, the SPDR Dow Jones Industrial Average ETF Trust (DIA) fell 0.70%, and the iShares Russell 2000 ETF (IWM) slid 1.38%.

Among the Main Street catalysts, the Commerce Department is scheduled to release the durable goods orders report for June. Economists, on average, expect an 11.1% month-over-month drop in durable goods orders, following May’s 16.4% jump.

Important earnings reports are scheduled for Friday, including those from AutoNation (AN), Centene (CNC), Charter Communications (CHTR), HCA (HCA), and Lear (LEA).

LPL Financial Chief Technical Strategist Adam Turnquist weighed in on the implications of the cumulative two-year S&P 500 advance-decline (A/D) line setting a new high earlier this week. The line is calculated by taking the difference between the number of advancing and declining stocks on the index for a given trading day and adding that difference to the prior day’s value.

The “new high in the A/D line reinforces the health of the bull market, signaling a broader rally with receding concentration risk,” the strategist said.

Gold and crude futures exhibited contrasting movements, as the economic impact of trade deals bolstered risk appetite for oil.

The 10-year U.S. Treasury yield, which climbed on Thursday, has pulled back below the 4.40% mark in the Asian session. The dollar extended its modest strength against major currencies. 

Most major markets retreated on Friday amid profit taking following two sessions of strong gains set in motion by the U.S.-Japan trade deal.

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