U.S. stocks set to open higher as Dow components reports strong earnings

U.S. stocks were set to open higher on Wednesday, with strong earnings from Dow components IBM, United Technologies and Procter & Gamble looking to propel a rebound after Wall Street suffered its second-biggest decline in 2019. Futures pointed to a 0.7 per cent gain on the Dow Jones Industrial Average at the open, with shares of International Business Machines Corp jumping 6.9 per cent after projecting 2019 profit above expectations.

United Technologies Corp rose 4.3 per cent after the industrial conglomerate reported a better-than-expected profit and forecast 2019 earnings above estimates, boosted by the acquisition of aero parts maker Rockwell Collins. Fellow industrial companies in the Dow, Boeing Co, Caterpillar Inc and 3M Co rose between 0.2 per cent and 0.9 per cent.

The gains follow Wall Street's more than 1 per cent loss on Tuesday as worries about slowing global growth came to the fore after a gloomy economic outlook from the International Monetary Fund, signs of further cooling in China's economy and mixed reports on U.S.-China trade talks. "Given a day like yesterday, a bounce driven by earnings is not unusual," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

"UTX is an industrial company, is definitely something investors are looking at for hints on the impact of a global economic slowdown. The fact that it provided a strong forecast just shows the U.S. economy is actually solid," Antonelli said. At 8:46 a.m. ET, Dow e-minis were up 159 points, or 0.65 per cent. S&P 500 e-minis were up 10 points, or 0.38 per cent and Nasdaq 100 e-minis were up 25.75 points, or 0.39 per cent.

Despite the pullback on Tuesday, the benchmark S&P 500 index is about 10 per cent away from its record closing high on Sept. 20 and has climbed about 5 per cent this year. Procter & Gamble Co rose 4.3 per cent after its quarterly revenue beat Wall Street's expectation, driven by strong demand for beauty and fabric care products.

The U.S. cable services provider Comcast Corp rose 2.6 per cent after its quarterly revenue beat analysts' estimates, helped by lower-than-expected video subscriber losses. Among the decliners were shares of Kimberly-Clark Corp, which fell 4.2 per cent after the Kleenex-tissues maker's profit missed analysts' estimates due to rising raw materials costs and a strong U.S. dollar.

Abbott Laboratories dropped 2.4 per cent after the healthcare company missed quarterly revenue estimate due to lower sales of generic drugs in emerging markets and gave a downbeat forecast for the current quarter. Of the 61 S&P 500 companies that reported until Tuesday, 78.7 per cent have beat Wall Street's profit estimates and that is above the historical average of 64 per cent, according to Refinitiv data. However, earnings growth estimates have dropped to 14.1 per cent from 20.1 per cent at the start of October.