Here are the most important news, trends and analysis that investors need to start their trading day:
- Nasdaq futures jump 1.5% as Google parent Alphabet surges
- Alphabet delivers strong quarter, plans a 20-for-1 stock split
- PayPal plunges on weak guidance; AMD surges on strong outlook
- GM sees strong full-year earnings as chip shortage abates
- Starbucks earnings miss on higher costs, CEO sees more inflation
1. Nasdaq futures jump 1.5% as Google parent Alphabet surges
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U.S. stock futures rose Wednesday, with Google parent Alphabet's over 9% premarket surge on strong earnings pushing Nasdaq futures more than 1.5% higher as Wall Street looks to advance for the fourth straight session. Shares of Facebook parent Meta Platforms rose 3% in the premarket ahead of earnings out after the bell.The late-January market rally continued into February, with the Dow Jones Industrial Average, the S&P 500 and the Nasdaq closing up roughly 0.7% each. The Nasdaq remained in correction territory heading into the new trading day.
Ahead of Friday's monthly employment report, ADP said before-the-bell Wednesday that U.S. companies cut 301,000 jobs in January as the spread of the Covid omicron variant slammed hiring. Economists had expected growth of 200,000 new private-sector positions. December was downwardly revised to a 776,000 gain. It's worth noting that during the pandemic, the ADP numbers have not been the best indicator of the government's overall jobs report.
2. Alphabet delivers strong quarter, plans a 20-for-1 stock split
If Alphabet's premarket advance were to hold at the open, the stock would top November's all-time high and go back above a $2 trillion market value. Late Tuesday, the tech giant reported better-than-expected earnings and revenue for the fourth quarter. It beat estimates in the services and cloud businesses. Alphabet announced a 20-for-1 stock split, pending shareholder approval, leading to speculation about whether the name could eventually be added to the Dow 30. It also repurchased a record $13.47 billion of stock in the quarter.
3. PayPal plunges on weak guidance; AMD surges on strong outlook
PayPal reported disappointing fourth-quarter results after the closing bell Tuesday, and the stock got pummeled, sinking more than 18% in the premarket. The digital payments company slightly missed estimates for fourth-quarter earnings and slightly beat on revenue. But it was the forward guidance that really crushed the stock.
Advanced Micro Devices shares jumped 11% in Wednesday's premarket, the morning after the chipmaker reported fourth-quarter earnings and revenue that beat estimates and delivered a strong full-year sales forecast. With the closing of the Xilinx acquisition on the horizon, AMD is poised to add more firepower to compete against Intel in the data center semiconductor market.
4. GM sees strong full-year earnings as chip shortage abates
General Motors shares rose more than 2% in the premarket after the automaker said late Tuesday that it expects to generate an operating profit this year of between $13 billion and $15 billion as a semiconductor shortage that marred vehicle production and sales for most of last year shows signs of improving. GM reported a mixed fourth quarter, beating estimates on earnings but slightly missing on revenue.
5. Starbucks earnings miss on higher costs, CEO sees more inflation
Starbucks shares fell 3% in premarket trading following the coffee giant saying after the bell Tuesday that higher costs are weighing on profits, leading the company to miss fiscal first-quarter earnings estimates and cut its full-year profit outlook. Starbucks did beat estimates on Q1 revenue. CEO Kevin Johnson said on the company's earnings call that he's anticipating higher inflation for the rest of the year.