By Peter Nurse
Investing.com - U.S. stocks are seen opening higher Tuesday, rebounding after the previous session’s Omicron-related losses and helped by strong earnings from Micron Technology (NASDAQ:MU) and, to a lesser extent, Nike (NYSE:NKE).
At 7 AM ET (1200 GMT), the Dow Futures contract was up 320 points, or 0.9%, S&P 500 Futures traded 45 points, or 1%, higher and Nasdaq 100 Futures climbed 170 points, or 1.1%.
The major indices tumbled on Monday on the prospect of slowing growth, given the surge in new Covid cases, and the likely failure of President Joe Biden’s near $2 trillion social spending bill to pass through the Senate after Senator Joe Manchin, a moderate Democrat, withdrew his support.
The blue chip Dow Jones Industrial Average slumped over 400 points, or 1.2%, the broad-based S&P 500 fell 1.1% and the tech-heavy Nasdaq Composite dropped 1.2%.
However, the tone is more optimistic Tuesday. The chief executive of Moderna (NASDAQ:MRNA) stated that the U.S. drugmaker could develop a booster shot to protect against the Omicron variant in a relatively short period.
"It only needs minor adjustments for Omicron. I don't expect any problems," CEO Stephane Bancel said in an interview with the Swiss newspaper TagesAnzeiger published on Tuesday.
The rapid growth of cases of the Omicron Covid variant has prompted worries that the country’s economic recovery could stall just as the Federal Reserve is starting to rein in its accommodative monetary policy. The Omicron variant has been found in at least 43 states and accounted for 73% of new infections in the U.S. last week, according to the Centers for Disease Control.
Also helping sentiment were strong numbers from the corporate sector. Nike stock is seen higher premarket after sales of its shoes and apparel in North America, the company’s largest market, rose 12% year-on-year, offsetting a 20% slump in sales in China. The company's suppliers in Vietnam are, however, still producing around 20% below their pre-pandemic levels.
Micron is also seen posting robust gains premarket after a solid start to the chipmaker's financial year, driven by strong demand for memory and storage chips, led it to promise a record year of sales with “solid profitability”.
The likes of General Mills (NYSE:GIS) and Rite Aid (NYSE:RAD) are also seen reporting quarterly results later Tuesday.
Oil prices rose Tuesday, rebounding after a couple of days of sharp selling, and investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.
The industry body estimated that crude stockpiles fell 815,000 barrels for the week ended Dec. 10, while the official government inventory report showed a draw of over 4.5 million barrels.
By 7 AM ET, U.S. crude futures traded 1.7% higher at $69.75 a barrel, while the Brent contract rose 1.5% to $72.57.
Additionally, gold futures rose 0.2% to $1,798.25/oz, while EUR/USD climbed 0.1% higher to 1.1284.