U.S. stock futures rise as companies top earnings estimates

U.S. stock futures rise as companies top earnings estimates

Stock futures gained Tuesday morning, shaking off declines from a day earlier as a number of closely watched companies topped quarterly earnings estimates.

Contracts on the S&P 500 ticked up after the blue-chip index ended a choppy session on Monday lower. The Dow also pointed to a higher open after the index reached a record high intraday on Monday before closing in red.

Under Armour's stock rose after the athletic-wear maker raised second-quarter sales estimates and topped its full-year financial outlook. Shares of video game company Take-Two Interactive however, fell in early trading after the company's current forecast missed estimates, overshadowing an otherwise better than expected print on profit and sales for its latest quarter. Meanwhile, Simon Property Group shares advanced after the company posted second-quarter results that handily exceeded estimates, increased its guidance and doubled its dividend, with the mall real estate operator seeing occupancy rates and foot traffic improving alongside the reopening of the economy.

In recent session, three major Stock Indexes have drifted as investors seek more catalysts from corporate earnings results, economic data and policymakers.

At the same time, we are going through a couple of transitions right now," George Mateyo, Key Private Bank Chief Investment Officer, told Yahoo Finance. The first one, of course, is this slowdown in growth. After the pandemic, we've seen massive lift-off and growth.

Secondly, we have to contend with the Fed and their transition as well, both in leadership side and also with regard to policy, he added. But then we have the Delta variant to consider in terms of transitioning potentially to a new wave of cases for the COVID - 19 scenario.

In terms of the economic outlook, Friday's July jobs report from the Labor Department will help provide a better sense of how much ground labor market returned this summer, and whether the economy is closing in on the threshold of recovery to prompt a pivot to the Federal Reserve's ultra-supportive monetary policy. And on Tuesday, companies including Avis Budget Group and Lyft Match Group are scheduled to report quarterly results.

Despite Monday's drift, stocks are still holding near to record levels, supported by the combination of overall strong second-quarter earnings results, an efficient economic recovery and still supportive Federal Reserve. However, some strategists are cautioning investors to remain vigilant given stocks' volatility and the relatively long stretch of time since equities' closing-out. U.S. stocks had gone for more than 180 trading days without a correction of 5%, in one of the 15 longest periods for the equity market without such a pullback, according to recent research by Goldman Sachs.

There was almost a level of perfection priced into the market coming into summer, and reopening that was really strong as well, Ross Mayfield, Baird investment strategy analyst, told Yahoo Finance. I do think there is a lot of things working against the market near-term both from a technical and fundamental perspective. And I wouldn't be surprised to see some volatility and maybe a bit of correction in the near-term before resuming what should still be a really strong structural bull market.

ET Tuesday : Stock futures hold overnight gains as more earnings top estimates are released.