Stock Futures Boosted By Earnings Reports?

While most Americans were sound asleep this morning, stock futures, for a second time in three trading days rocketed higher.  On Tuesday morning the excuse was that the ECB would be buying corporate bonds.  The ECB denied that but stocks still held their gains.  This morning's ramp higher is being blamed on strong earnings reports?  We had terrible earnings reports lift  stocks higher earlier in the week.

U.S. stock futures rose Thursday, boosted by strong third-quarter earnings from Caterpillar Inc. and other companies.

But none of these companies reported earnings at 4:30am?  Stock futures were at session highs long before earnings reports came out.

$IBM and $KO reported terrible earnings earlier this week and stock futures still climbed.

Stock futures this morning, just like on Tuesday morning, were drifting lower and setting up for further downside.....  and then they exploded to the upside.

Do we need an excuse for every tick higher or lower for stocks?  Yeah we probably do.

U.S. stock futures rose Thursday, boosted by strong third-quarter earnings from Caterpillar Inc. and other companies.

Dow Jones Industrial Average futures rallied 135 points, or 0.8%, to 16559. S&P 500 futures gained 15 points, or 0.8%, to 1940 and Nasdaq-100 futures added 32 points, or 0.8%, to 3981. Changes in stock futures don't always accurately predict stock moves after the opening bell.

Caterpillar reported better-than-expected results in the third quarter and lifted its profit outlook for the year to $6.50 a share, up from $6.20 a share. Shares rose 4.3% in premarket trade, making Caterpillar the best performer on the Dow.

Stocks fell Wednesday, snapping a three-day rally for the Dow. The blue-chip index fell 0.9% to 16461.32 and the S&P 500 lost 0.7% to 1927.11.

U.S. stocks have swung wildly in the past month as weak economic data raised worries about potential deflation in the eurozone and third-quarter growth slowed in China. The Dow has fallen 3.4% and the S&P has declined 2.3% in October, through Wednesday's close.

There are "concerns about Europe and concerns about China, but it still comes down to earnings," said Robert Pavlik, chief market strategist at Banyan Partners. Earnings and improving U.S. data, especially in the labor market, should boost stocks this year, he said.

European shares fell, with the Stoxx Europe 600 down 0.2%. Markit's monthly composite purchasing managers index for the eurozone, which measures activity in the manufacturing and services sectors, rose to 52.2 in October from 52.0 in September. A reading above 50 indicates expanding activity. But the details of the report were negative, showing that firms cut prices at the fastest pace since early 2010 and businesses cut jobs for the first time since November 2013.

The data added pressure on the European Central Bank to announce more stimulus. European stocks rose earlier this week on reports the ECB is considering purchasing corporate bonds if more aggressive measures are needed.

In Asia, Japanese and Chinese shares fell after a preliminary report on Chinese manufacturing activity from HSBC inched up to 50.4 in October from 50.2 in September. Earlier this week, data showed China's third-quarter economic growth was the slowest in five years, though slightly faster than expected.

In U.S. economic news, jobless claims in the most recent week are expected to rise to 282,000, according to economists surveyed by The Wall Street Journal. A reading on the U.S. manufacturing sector from Markit is forecast to fall to 57.0 in October from a final September reading of 57.5.

The yield on the 10-year Treasury note rose to 2.241%. Yields rise as prices fall.

In commodity markets, crude-oil futures rose 1.2% to $81.46 a barrel. Gold futures fell 0.8% to $1235.10 an ounce.

In other earnings news, Comcast Corp. said its third-quarter profit rose 50%, boosted in part by a favorable tax adjustment. Per-share earnings beat expectations. Shares rose 1% in premarket trade.

General Motors Co. reported per-share earnings that beat expectations in the third quarter. GM shares increased 2.2% premarket.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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