US stocks likely to open higher after easing concerns over tech stocks
U.S. stocks were set to open higher on Tuesday, as strong results from Home Depot Inc and hopes of progress in the U.S.-China trade talks helped Wall Street's recovery from a technology-driven selloff.
Shares of Home Depot rose 1 per cent in premarket trading after the No.1 home improvement chain exceeded analyst estimates for quarterly comparable-store sales.
The report comes in a big week for retail earnings, with results from companies including Walmart Inc and Macy's Inc likely to show how rising wages in the United States are eating into margins.
Also helping was a report that China's top trade negotiator was preparing to visit the United States before a meeting between the leaders of the world's two largest economies.
"It seems like some pressure regarding trade has been alleviated," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey. "However, the market will take a defensive posture until visibility increases with regard to trade."
The development comes as China President Xi Jinping and U.S. President Donald Trump plan to meet on the sidelines of a G20 summit that is being held in Argentina at the end of November.
The main indexes tumbled on Monday as shares of Apple Inc slid 5 per cent after several suppliers to the iPhone maker cut their forecasts, signalling that demand for iPhones could be softening.
Following that, Goldman Sachs cut its earnings estimate for Apple and another key supplier Foxconn reported a weaker-than-expected rise in quarterly profit.
Apple's shares were down 1.1 per cent, set for its fourth day of losses.
After a stellar rally for technology shares that has fueled a decade-long gain for U.S. stocks, appetite for the group has started to wane lately on concerns about tighter regulation and demand for chipmakers.
Allocation to the global tech sector collapsed to the lowest since February 2009, according to a Bank of America Merrill Lynch survey that also showed the S&P 500 index was broadly expected to rise 12 per cent more before peaking.
At 8:51 a.m. ET, Dow e-minis were up 40 points, or 0.16 per cent. S&P 500 e-minis were up 8.5 points, or 0.31 per cent and Nasdaq 100 e-minis were up 30.25 points, or 0.44 per cent.
Advance Auto Parts Inc rose 5.9 per cent after the company raised full-year sales forecast and reported better-than-expected third-quarter results.
Meat processor Tyson Foods Inc fell 4.6 per cent after its fourth-quarter revenue fell short of Wall Street estimates, hurt by lower demand for chicken.
(With inputs from agencies.)