By Peter Nurse
Investing.com - U.S. stocks are seen opening a little higher Wednesday, as investors digest the competing stories of positive news surrounding potential vaccines and mounting numbers of Covid-19 infections.
At 07:05 AM ET (1205 GMT), the Dow futures contract rose 126 points, or 0.4%, S&P 500 futures traded 10 points, or 0.3%, higher, and Nasdaq 100 futures climbed 12 points, or 0.1%.
The major stock indices are having a strong November, boosted by positive news from two U.S. drugmakers--Pfizer updated the efficacy of its candidate to 95% Wednesday--about the effectiveness of their potential Covid-19 vaccines.
The Dow Jones Industrial Average is up more than 12% and the S&P 500 is up more than 10% so far this month. The Nasdaq Composite is up more than 9%, underperforming due to the rotation out of technology shares into cyclical plays.
This has come against a background of an increasing number of Covid-19 infections across the U.S., now averaging over 150,000 new cases a day. This has resulted in a number of major cities, including Chicago, Philadelphia and New York, announcing new restrictions to try and stem the spread.
Federal Reserve Chair Jerome Powell Tuesday applauded the recent news over potential vaccines, but said the U.S. economy still has a “long way to go”, while calling for additional fiscal stimulus to support the economic recovery.
House Speaker Nancy Pelosi called Tuesday for fresh negotiations with Republicans on a fiscal-stimulus package, with the House returning to session next week, but with the political climate still highly partisan it’s doubtful common ground can be reached.
The retail sector continues to offer up quarterly earnings, after Walmart's (NYSE:WMT) bigger-than-expected bump in quarterly same-store sales, with Target (NYSE:TGT), Lowe’s (NYSE:LOW) and TJX Companies (NYSE:TJX) reporting before the opening bell Wednesday.
Economic data Wednesday comes from the buoyant housing market, with October housing starts and building permits information due at 8:30 AM ET (1230 GMT).
Oil prices strengthened Wednesday despite a jump in U.S. inventories raising concerns of a potential supply glut as traders look to plans by the top producers to rein in output next year.
The industry body, the American Petroleum Institute, said late Tuesday that U.S. crude stockpiles rose by 4.2 million barrels last week, well above expectations for a build of 1.7 million barrels. Official supply data are due later in the session.
OPEC+, a group which includes members of the Organization of the Petroleum Exporting Countries as well as Russia, currently plans to boost output by 2 million barrels per day in January. But expectations are growing that their meeting at the end of the month will see this plan postponed.
Crude futures traded 1.8% higher at $42.38 a barrel, while the international benchmark Brent contract rose 1.8% to $44.56.
Elsewhere, gold futures fell 1.1% to $1,864.80/oz, while EUR/USD traded 0.1% higher at 1.1867.