MARKET SNAPSHOT: Dow Set To Stabilize After Shedding 540 Points In 2 Days

By FeaturesDow Jones Newswires

Analyst: 'Equities seem to be appreciating the uneventful State of the Union address from President Trump last night'

U.S. stock futures were rising modestly Wednesday, putting the Dow on track to recover somewhat from a two-day drop in which it shed 540 points, or 2%.

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Strategists said President Donald Trump's relatively unsurprising State of the Union address could be helping the investing mood, as traders brace for a Federal Reserve statement, more earnings reports and a raft of economic data.

What are the main benchmarks doing?

Dow Jones Industrial Average futures gained 82 points, or 0.3%, to 26,137, while S&P 500 futures added 8.75 points, or 0.3%, to 2,833.25. Nasdaq-100 futures tacked on 19.5 points, or 0.3%, to 6,961.25.

On Tuesday, the Dow suffered its biggest one-day drop in eight months (http://www.marketwatch.com/story/dow-futures-slide-150-points-signaling-another-painful-session-2018-01-30), falling by 363 points, or 1.4%. The S&P 500 gave up 1.1%, and the Nasdaq Composite lost 0.9%.

What are strategists saying?

"Equities seem to be appreciating the uneventful State of the Union address from President Trump last night," said Konstantinos Anthis, an ADS Securities analyst, in a note.

"We believe that stock traders will be relieved that Trump toned down his remarks on U.S. trade relations and instead focused on the domestic agenda, but it might not be enough to divert attention back to stocks as long as bonds give a better payout at this time."

Read more:Trump praises economy, calls for infrastructure, immigration deals (http://www.marketwatch.com/story/trump-takes-more-optimistic-tone-in-state-of-the-union-2018-01-30)

What's helping to drive markets?

The three main stock gauges have slumped this week, with analysts saying rising bond yields have helped peel money away from equities. The yield on the 10-year Treasury note was down slightly at 2.704% Wednesday, after touching a three-year high on Tuesday (http://www.marketwatch.com/story/long-dated-treasury-yields-resume-rise-but-short-dated-bond-yields-trade-lower-2018-01-30).

Stocks also were simply due for a pullback after a strong start to the year, according to many analysts. The Dow remains up by 5.5% in 2018 even after this week's selloff, helped by factors such as an expanding U.S. economy, growth in corporate profits, and enthusiasm over recently enacted tax cuts and other business-friendly policies.

Accommodative monetary policy has continued to help the stock market as well, but a relatively hawkish statement from the Fed (http://www.marketwatch.com/story/fed-to-take-a-step-toward-a-march-interest-rate-hike-2018-01-26) is due for release at 2 p.m. Eastern Time. A hike in interest rates is not expected from the central bank's two-day policy-setting meeting, which ends today. The January meeting is Fed chief Janet Yellen's last as she hands the reins to Jerome Powell.

On the data front, ADP's January report on private-sector employment is due at 8:15 a.m. Eastern, then a fourth-quarter reading on employment costs is scheduled to arrive at 8:30 a.m. Eastern. Economists polled by MarketWatch expect 0.6% growth in such costs.

A release on business conditions in the Chicago area is expected at 9:45 a.m. Eastern, and a December report on pending home sales is on tap for 10 a.m. Eastern.

Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

Which stocks look like key movers?

Shares in Advanced Micro Devices Inc.(AMD) traded 3% higher premarket after the chip maker posted better-than-expected quarterly earnings (http://www.marketwatch.com/story/amd-earnings-outlook-top-street-estimates-but-shares-shaky-after-hours-anyway-2018-01-30) late Tuesday.

Check out:AMD earnings cap a stunning 2017, but there is still plenty to do (http://www.marketwatch.com/story/amd-earnings-cap-a-stunning-2017-but-there-is-still-plenty-to-do-2018-01-30)

Shares in Electronic Arts Inc.(EA) look set for an up day after the video game producer posted better-than-expected quarterly revenue (http://www.marketwatch.com/story/ea-stock-surges-in-late-trading-after-revenue-beat-2018-01-30) late Tuesday.

Xerox Corp.'s stock (XRX) was 6% higher in thin premarket action after the maker of copy machines said its quarterly net loss shrank (http://www.marketwatch.com/story/xerox-net-loss-shrinks-as-it-takes-us-tax-charge-2018-01-31). Xerox's stock also was getting a lift from news that Japan's Fujifilm Holdings Corp. (4901.TO) has taken a majority stake in the company.

Shares in drug giant Eli Lilly & Co.(LLY) , airplane maker Boeing Co.(BA) and insurer Anthem Inc.(ANTM) could see active trading, as they are among the companies expected to post earnings before the open.

What are other assets doing?

European stocks traded mostly higher, while Asian markets finished mixed. Gold was gaining, but oil futures were lower (http://www.marketwatch.com/story/oil-prices-stumble-ahead-of-us-inventory-data-2018-01-31). The ICE U.S. Dollar Index was adding to its recent drop.

(END) Dow Jones Newswires

January 31, 2018 05:24 ET (10:24 GMT)

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