MARKET SNAPSHOT: Dow Set To Open At Fresh Record As Bank Of America Warns Of 'frothy' Market

By Victor Reklaitis, MarketWatchFeaturesDow Jones Newswires

'This is beginning to look a little too frothy for our liking,' says Bank of America Merrill Lynch strategist

U.S. stock futures stepped higher Thursday, putting the Dow Jones Industrial Average on course for another record.

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Investors are getting a raft of earnings reports again, with Caterpillar Inc. and Intel Corp. among the big names posting results.

What are the main benchmarks doing?

Dow futures rose 40 points, or 0.2% to 26,310, while S&P 500 futures climbed 5.50 points, or 0.2%, to 2,846.50. Nasdaq-100 futures added 31.25, or 0.5%, to 6,962.75.

On Wednesday, the Dow rose 0.2% to a record close (http://www.marketwatch.com/story/dow-futures-rise-as-market-rally-shows-no-sign-of-abatement-2018-01-24), while the S&P 500 finished 0.1% lower and the Nasdaq Composite lost 0.6%.

The three equity gauges are up between 6.1% and 7.4% so far in 2018, adding to last year's sizable gains as investors cheer the expanding U.S. economy and growth in corporate profits.

What are strategists saying?

"While we remain bullish for the year as a whole, this is beginning to look a little too frothy for our liking," said James Barty, a Bank of America Merrill Lynch strategist, in a note on Thursday.

U.S. stock indexes and global benchmarks have been "fast out of the blocks" in the new year.

"Could equity markets melt up? Possibly," he added. "But additional shorter-term hedges make a lot of sense when things are as frothy as this."

Which stocks look like key movers?

3M Co.(MMM) , Caterpillar Inc.(CAT) , Celgene Corp.(CELG) , American Airlines Group Inc.(AAL)and Union Pacific Corp.(UNP)are likely to see active trading as they are among the companies on the earnings docket before the open.

Intel Corp. (INTC)and Starbucks Corp.(SBUX)are expected to report results after the close.

Facebook Inc.'s stock (FB)rose 0.5% in premarket action, looking unfazed by reports that U.K. Prime Minister Theresa May plans to blast (http://www.independent.co.uk/news/uk/politics/theresa-may-davos-speech-facebook-twitter-terrorist-propaganda-donald-trump-a8176281.html) social media companies again for providing platforms to terrorists, child abusers and slave traders. May, who is expected to make these remarks at the World Economic Forum in Davos, Switzerland, has previously criticized (https://news.sky.com/story/tension-between-theresa-may-and-facebook-over-extremism-online-10904140) such companies along these lines.

Ford Motor Co.'s stock (F)looks set for a down day after the car maker late Wednesday reported disappointing fourth-quarter results and reiterated a bleak outlook (http://www.marketwatch.com/story/fords-bleak-outlook-worsened-by-outside-factors-2018-01-24).

What are other assets doing?

European stocks (http://www.marketwatch.com/story/european-stocks-fall-to-1-week-low-as-all-eyes-on-ecb-2018-01-25)were little changed as traders braced for fresh policy signals from the European Central Bank, while most Asian markets closed lower. Gold futures and oil futures were gaining, and the ICE U.S. Dollar Index was extending its recent drop (http://www.marketwatch.com/story/dollar-falls-further-as-mnuchin-defends-weak-buck-comments-2018-01-25) that has taken it to three-year lows.

What economic data could help drive markets?

A report on U.S. weekly jobless claims is slated to hit at 8:30 a.m. Eastern Time, with economists polled by MarketWatch forecasting 240,000 claims. A December figure for advance trade in goods is due at that time as well, with a deficit of $68.9 billion expected.

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

At 10 a.m. Eastern, investors are due to get December data on new home sales and leading economic indicators. Economists predict 680,000 homes were sold.

(END) Dow Jones Newswires

January 25, 2018 06:36 ET (11:36 GMT)