By Sara Sjolin, MarketWatch
Tech stocks poised for recovery as Broadcom results spread
cheer
The S&P 500 was shaping up Thursday to break its longest
losing run since March, as traders welcomed upbeat earnings from
chip maker Broadcom.
Futures for all major U.S. stock benchmarks pointed north, on
optimism over continued progress on tax reforms out of Washington,
as the market started to look ahead to the monthly jobs report due
Friday.
What are futures doing?
Futures for the Dow Jones Industrial Average rose 15 points, or
0.1%, to 24,172, while those for the S&P 500 index added 4.30
points, or 0.2%, to 2,633.75. Futures for the Nasdaq-100 index
climbed 27.50 points, or 0.4%, to 6,320.50.
The gains come after a mixed session on Wednesday, when the
tech-heavy Nasdaq Composite Index outpaced the other benchmarks and
closed 0.2% higher after falling for three-days straight.
However, the S&P 500 index slipped 0.01%, enough to make for
a fourth straight lower close, its longest losing streak since
March. The Dow average ended down 0.2% on Wednesday.
What's driving the markets?
Tech stocks look to be making something of a comeback after
taking a battering earlier this week. From Friday through Tuesday,
the tech-heavy Nasdaq fell 1.6%, with analysts largely blaming the
drop on profit-taking after a big rally and on concerns about how
the U.S. tax overhaul will impact the tech sector.
Both the House and Senate passed their own versions of the tax
bill last week, and now the two need to bridge their differences
and agree on a final bill for President Donald Trump to sign. The
Republican-led Senate late Wednesday agreed to begin formal
negotiations
(https://www.wsj.com/articles/senate-votes-to-begin-tax-overhaul-negotiations-with-house-1512609708)
with the House, spurring hopes the final tax overhaul will be
completed by a self-imposed deadline of Dec. 22.
Another reason for eyes to turn to Washington was the potential
for a U.S. government shutdown. Trump is scheduled to meet
congressional leaders on Thursday to discuss a bill to keep the
government open. A bill to avoid a shutdown will also be up for a
vote in the House on Thursday, after the House Rules Committee on
Wednesday put together a temporary funding package.
Investors were also looking ahead to the closely watched nonfarm
payrolls report out on Friday.
What are strategists saying?
"The outlook for the Dow has turned near-term corrective," said
Richard Perry, market analyst at Hantec Markets. "It will be
interesting to see now how the bulls react to an intraday rebound.
If support can begin to build and hold, then the bulls can begin to
think of buying opportunities. Friday's low at 23,922 is initially
supportive, with 24,350 now initial resistance."
"A decent read through from the ADP employment change yesterday
sets up for a nonfarm payrolls tomorrow, where with a rate hike
nailed on for December, a dollar positive/risk positive reaction
would meet a positive surprise in the data," Perry said in a
note.
Which stocks are in focus?
A premarket rally in Broadcom Ltd.(AVGO) helped beef up the
S&P and Nasdaq on Thursday. Shares of the chip maker climbed
5.6% after it reported earnings that topped Wall Street estimates
(http://www.marketwatch.com/story/broadcom-shares-shaky-after-earnings-beat-2017-12-06)
late Wednesday.
Shares of Digital Power Corp.(DPW) jumped 18% ahead of the bell.
The power-supply provider's stock tanked 25% on Wednesday in a
late-session selloff, after being up as much as 31% earlier in the
day, on talk of a deal with online retailer Amazon.com Inc. (AMZN)
. But the company said late Wednesday that it had "entered into no
agreement and has received no order from Amazon."
Citigroup Inc.(C) was in focus after the bank said late
Wednesday it's likely to take a $20 billion hit to profits
(http://www.marketwatch.com/story/citigroup-likely-to-take-20-billion-hit-from-republicans-tax-plan-2017-12-07)
under the new tax plans passed by Congress.
Dollar General Corp.(DG) is slated to report earnings before the
market open.
What's new in economics?
A reading on weekly jobless claims is due at 8:30 a.m. Eastern
Time, while the flow of funds report for the third quarter comes
out at noon Eastern. Consumer credit for October is on the docket
at 3 p.m. Eastern.
William Dudley, president of the Federal Reserve Bank of New
York, is scheduled to give introductory remarks at the "Higher
Education Financing and Costs and Returns of Higher Education"
event, held at the Federal Reserve Bank of New York, at 8:30 a.m.
Eastern.
What are other markets doing?
Asian stocks closed mixed, while European equities mostly traded
higher
(http://www.marketwatch.com/story/european-stocks-on-course-to-break-losing-streak-as-betting-shares-catch-a-bid-2017-12-07)
in the early going.
The ICE Dollar Index was up 0.1% at 93.684, rising for a fourth
straight session.
Oil futures rebounded, rising 0.5%, while gold prices dropped
0.6%.
Bitcoin continued its rally, breaking through $15,000, just a
day after topping the $14,000 level
(http://www.marketwatch.com/story/bitcoin-hitting-new-records-tops-200-billion-in-market-capitalization-2017-12-05)
for the first time.
(END) Dow Jones Newswires
December 07, 2017 06:15 ET (11:15 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.