Wall Street set to get a lift from JPMorgan results, big energy deal

(Reuters) – U.S. stocks were set to open higher on Friday, boosted by better-than-expected results from JPMorgan, a $33 billion energy deal and signs of stability in Chinese economy.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 9, 2019. REUTERS/Brendan McDermid/File Photo

The S&P 500 e-minis were up 17.25 points, or 0.6% by 8:42 a.m. ET. If the gains hold at the open, the benchmark would top 2,900 points for the first time since Oct. 5.

JPMorgan Chase & Co rose 2.8% after the largest U.S. bank by assets beat quarterly profit estimates, easing fears that slowing economic growth could weigh on its results.

Shares of Well Fargo & Co climbed 0.5% after reporting a 16.4 percent increase in quarterly profit.

“The market has been stagnated for a while and when you get a good report like JPM then that’s going to help sentiment and will probably be the main focus for the next three weeks,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

Another big gainer premarket was Walt Disney Co, whose shares rose 6.3% after the company priced it highly anticipated streaming service in a bid to challenge the digital dominance of Netflix Inc. Netflix shares were down 1.5%.

S&P 500 companies are expected to post their first profit contraction since 2016 in the first quarter, with analysts projecting a 2.5 percent drop in earnings.

Bank earnings are also expected to see a steep drop. S&P 500 banks are expected to post earnings growth of 1.8%, down from an 8.2% rise estimated six months ago, according to Refinitiv data.

The S&P banks index has risen 12.8% this year, compared with a 15.2% gain for the S&P 500.

Data from China showed exports rebounded in March but imports shrank for a fourth straight month and at a sharper pace. The data, which eased concerns about a slowdown in world’s second largest economy, as well as a jump in oil prices offered support to global equities.

Grabbing the spotlight in the energy sector was Chevron Corp’s $33 billion offer to buy smaller rival Anadarko Petroleum Corp. Shares of Anadarko jumped 31.6%, while Chevron fell 4.6%.

Shares of Anadarko’s peers were also up on the news. Devon Energy Corp and EOG Resources Inc gained 4.4% each, while Marathon Oil Corp was up 3.1%.

Dow e-minis were up 227 points, or 0.87% and Nasdaq 100 e-minis were up 36.5 points, or 0.48%.

The S&P 500 index is now less than 2% away from its all-time high hit in September and investors are hoping that a trade deal with China and a better-than-feared quarterly earnings season will help push Wall Street above record.

Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Anil D’Silva

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