U.S. stock futures rose sharply on Monday morning as investors rallied for a big week of corporate earnings.
S&P 500 futures (^GSPC) rose 1.2%, while futures linked to the Dow Jones Industrial Average (^DJI) added 300 points, or 1%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) rose 1.4%.
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The moves come after a roller-coaster week on Wall Street that saw the S&P 500 post its fifth-biggest intraday reversal from an all-time low on Thursday, even as consumer price data showed that Inflation continued its stubborn course through the US economy last month. Still, the benchmark index ended the week down.
Wall Street will turn its attention to how U.S. companies are holding up amid persistently high prices and the Federal Reserve’s efforts to stabilize them as companies release their third-quarter financials. Bellwethers, including Netflix, Tesla and IBM, are expected to report results through Friday.
The start of the third quarter earnings season has been weaker than usual, with below-average positive earnings and revenue surprises coming from earnings reports so far. Of about 7% of S&P 500 companies that reported third-quarter earnings to the data, 69% have earnings per share above estimates — below the five-year average of 77%, according to FactSet Research.
Bank of America (BAC) was the second-to-last of the nation’s six largest banks by assets to report earnings on Monday morning. Shares rose more than 3% premarket after the company disclosed trading earnings above Wall Street estimates. Like its peers, however, the bank has seen its profits slump as it sets aside funds for uncollected loan repayments in the event of an increase in defaults if the economy slips into a recession.
The central bank drama continued across the Atlantic to start the week. The Bank of England announced Monday morning that it would restart bond sales next week after an emergency bailout that involved a pause in selling to stabilize financial markets. UK Finance Minister Jeremy Hunt also canceled most of the tax package that led to the sale of UK assets, including plans to cut taxes.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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