US Stocks Trading Sideways Overnight as Investors Try to Build on Weekly Gains

U.S. stock index futures were mostly flat in the pre-market session early Friday as investors try to hold on to this week’s marginal gains. Volume is relatively light with China and Japan celebrating their Lunar holiday. The indexes are being underpinned by shares of Disney which rose in extended trading on Thursday.

At 05:00 GMT, March E-mini S&P 500 Index futures are trading 3903.50, down 8.50 or -0.22%. March E-mini Dow Jones Industrial Average futures are at 31314, down 45 or -0.14% and March E-mini NASDAQ-100 Index futures are trading 13708.75, down 20.25 or -0.15%.

Disney Smashes Streaming Subscriber Expectations, Boosting Segments Hurt by COVID

Dow component Disney jumped more than 2% in extended trading after the company reported strong growth in paid streaming subscribers and crushed expectations in its earnings report for its fiscal first quarter of 2021. Disney said it now has almost 95 million paid subscribers on its Disney+ streaming service.

Looking at the key numbers, Earnings per Share came in at 32 cents adjusted versus a loss of 42 cents expected. Revenue came in at $16.25 billion versus $15.9 billion expected, according to Refinitiv.

Friday Outlook

The major U.S. cash market stock indexes are on track to post a positive week at record levels, although the strong rally to begin February appears to be losing upside momentum. The S&P 500 and NASDAQ are up 0.8% and 1.2%, respectively, week to date, and they have rallied 5.4% and 7.3% this month. The Dow is up about 0.9% this week, bringing its February gains to 4.8%.

Investors are going to try to build on hopes for a smooth economic reopening as well as additional COVID stimulus. President Joe Biden said Thursday his administration has secured deals for another 200 million doses of COVID-19 vaccine from Moderna and Pfizer, bringing the U.S. total to 600 million. He added the U.S. will have enough supply for 300 million Americans by the end of July.

Thursday Recap

The NASDAQ and S&P 500 eked out modest gains on prospects of the $1.9 trillion relief bill that aims to jump start the U.S. economy, while a largely better-than-expected earnings season also bolstered sentiment.

Analysts now expect fourth-quarter earnings for S&P 500 firms to grow 3%, versus a 10.3% decline forecast at the beginning of January, per Refinitiv data. Stocks are trading with high multiples, raising fears the market is overvalued.

The tech sector and semiconductors hit record highs, while economy-linked energy and industrials took a back seat after being in the spotlight this year.

In stock related news, Pinterest Inc rallied 7.3% after a report said Microsoft Corp approached the image-sharing company in recent months about a potential buyout. However, the negotiations were currently not active, the report said.

In economic news, the number of Americans filing new applications for unemployment benefits were 793,000 last week, compared to 812,000 in the prior week, but they are well below the record 6.867 million reported last March when the pandemic hit the United States.