Stock futures hold steady, Microsoft sheds 2.6% after reporting earnings

FAN Editor

Futures contracts tied to the major U.S. stock indexes held steady at the start of the overnight session Wednesday evening as investors parsed through a slew of corporate earnings during an otherwise positive week.

Dow Jones Industrial Average futures fell 15 points at the start of the overnight session, implying a slight opening loss when regular trading resumes on Thursday. S&P 500 and Nasdaq-100 futures were little changed and up a hair, respectively.

Wall Street’s attention in after-hours trading Wednesday evening was focused on earnings announcements from several U.S. companies, but especially Microsoft and carmaker Tesla.

Despite better-than-expected figures, software giant Microsoft shares fell as much as 3% in after-hours trading. Though the company’s results were largely positive, Microsoft said its transactional license purchasing continued to slow and that subsidiary LinkedIn was negatively impacted by the weak job market.

Tesla, meanwhile, blew past analyst expectations and posted its fourth consecutive quarter of profit, opening the door for the company’s inclusion in the S&P 500.  Excluding one-time charges, Tesla’s second-quarter earnings per share of $2.18 were well above the 3 cents per share expected by analysts polled by Refinitiv.

Elon Musk’s automaker also said it’s set “for a successful second half” and reiterated its goal of delivering 500,000 vehicles this year. 

The after-hours moves followed a positive regular session on Wednesday, with the major indexes all posting modest gains on both vaccine and federal stimulus announcements. 

The Dow Jones Industrial Average finished the day up 165.44 points, or 0.6%, with McDonald’s and Microsoft contributing the most to the index. The S&P 500 also rose about 0.6% as utilities and real estate investment trusts led the broader market higher. The Nasdaq Composite, meanwhile, rose 0.2%.

The three indexes are up 1.25%, 1.59% and 1.9%, respectively, for the week.

Equities caught a morning bid after the U.S. agreed to pay drugmaker Pfizer and German partner BioNTech nearly $2 billion for 100 million coronavirus vaccines if their candidate proves both safe and effective.

U.S. stocks also rallied toward the end of the regular session on Wednesday after sources told CNBC that congressional Republicans are weighing an extension of watered-down federal unemployment benefits through the end of the year.

On Thursday, the Labor Department will release its latest report on weekly jobless claims. The weekly figures provide Wall Street with critical insight on how many Americans continue to collect unemployment benefits, known as continuing claims.

Another 1.3 million workers are expected to have filed first-time claims for state unemployment benefits during the week ended July 18.

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