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US STOCKS-Futures rise for second day; Facebook gains after results

Updated: 31-10-2018 18:48 IST
U.S. stock index futures rose on Wednesday, setting Wall Street on course for a second day of gains at the end of a brutal month, as Facebook led a slew of encouraging earnings reports.

Shares of Facebook Inc climbed 5.5 percent premarket after the social media giant eased investor concerns by forecasting that margins would stop shrinking after 2019 as costs from scandals ease up.

Facebook reported a second-straight quarter of record-low user growth, confirming investors' fears of a slowing growth, but analysts said the results were not as bad as feared.

That brought some relief to the so-called FANG group of high-growth internet stocks. Inc rose 1.9 percent, Netflix Inc climbed 2.9 percent and Google-parent Alphabet Inc gained 1.9 percent.

Strong earnings reports from companies including General Motors Co, Yum Brands Inc and Estee Lauder Cos Inc, all of which have a fair share of exposure to China, also boosted sentiment.

"Some continuation of yesterday's strength with pretty good results in the last hour, so this momentum is expected to continue today," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"There is more comfort right now at least and less anxiety since we're finishing out the month."

The FANG group and Apple Inc have led the slide on Wall Street this month, which has left the S&P 500 and Dow Industrials with barely any gains for the year, fanned by concerns over trade, higher borrowing and wage costs, fears of corporate earnings peaking and a host of geopolitical worries.

The S&P has not posted gains for two sessions in a row so far in October, during which the index has tumbled nearly 8 percent, set for its biggest monthly drop in over eight years.

At 8:54 a.m. ET, Dow e-minis were up 231 points, or 0.93 percent. S&P 500 e-minis were up 27.75 points, or 1.03 percent and Nasdaq 100 e-minis were up 104.5 points, or 1.53 percent.

The ADP national employment report showed private payrolls increased by 227,000 this month, the highest rise since February. It comes ahead of the more comprehensive non-farm payrolls report on Friday.

But, data also showed U.S. labor costs accelerated in the third quarter as wages for both private and government workers surged amid tightening labor market conditions.

General Motors jumped 6.4 percent after the carmaker's robust quarterly results and forecast.

Yum Brands was up 3.3 percent and Yum China Holdings Inc rose 7.2 percent as strong KFC sales drove results.

Estee Lauder gained 7.1 percent after the cosmetics maker said higher demand in Asia boosted quarterly results and higher full-year profit outlook.

But, Kellogg Co fell 5.2 percent after cutting its full-year profit outlook due to higher advertising and distribution costs. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)