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Wall St. set to rise as focus turns to earnings season

Kitco News

(Reuters) - Wall Street’s main indexes were set to open slightly higher on Tuesday as investors looked to the earnings season this week for clues on the health of Corporate America and the economy while awaiting details on the next package of official economic stimulus.

The three main indexes ended off all-time highs on Monday as investors worried that attempts to impeach President Donald Trump could delay the Joe Biden administration’s first moves on stimulus, spurring some profit-taking on the past month’s gains.

Democrats will give Trump one last chance on Tuesday to leave office days before his term expires or face an unprecedented second impeachment over his supporters’ storming of the U.S. Capitol on Jan. 6.

“Even if (additional stimulus) is delayed, it’s going to be a matter of days, maybe weeks, not months. The question is the shape and form of it,” said Keith Buchanan, portfolio manager at GlobAlt in Atlanta.

“With earnings season upon us, it refocuses the market on fundamentals.”

Fourth-quarter earnings will take center-stage starting on Friday, with results from JPMorgan, Citigroup and other big banks launching the reporting season.

Earnings for S&P 500 companies are expected to have dropped 9.8% year-over-year in the final quarter of 2020, according to IBES data from Refinitiv, but they are expected to rebound in 2021, with a gain of 16.4% projected for the first quarter.

At 8:42 a.m. ET, Dow E-minis were up 59 points, or 0.19%, S&P 500 E-minis were up 6 points, or 0.16%. Nasdaq 100 E-minis were up 15.5 points, or 0.11%.

Morgan Stanley, JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup and Wells Fargo rose between 1% and 1.9% in premarket trading on the back of a rise in U.S. Treasury yields. [US/]

Hopes of a big boost to public spending and speedy rollout of vaccines under a Democratic-led U.S. Congress have pushed Wall Street to record highs, with growth-linked financial, industrial and energy stocks leading the market higher.

However, investors are weighing how much further the rally in so-called value stocks can run, after a year in which they have trailed behind technology and other “stay-at-home” winners from the coronavirus crisis.

Albertsons Cos Inc rose 4.2% after the grocer reported quarterly sales above estimates, as consumers wary of rising coronavirus cases stocked their pantries and cooked more at home.

U.S.-listed shares of Tencent Music Entertainment Group gained 7% after a report said the Chinese music platform is in talks with banks for a secondary Hong Kong listing as it seeks to raise up to $3.5 billion.

Becton Dickinson and Co added 3% after the medical devices maker forecast first-quarter revenue above Wall Street estimates due to strong demand for its COVID-19 diagnostic tests.

Reporting by Devik Jain and Medha Singh in Bengaluru; editing by Patrick Graham and Maju Samuel

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