Market Snapshot: Dow futures rise 150 points as Syria fears fade, with Bank of America due to report

Market Snapshot: Dow futures rise 150 points as Syria fears fade, with Bank of America due to report

U.S. stock futures tilted higher on Monday, as the market took news of U.S.-led strikes against the Syrian regime in its stride and turned its focus to a busy week for earnings.

Bank of America Corp. is expected to release its results before the bell, closely watched after the other big four banks’ shares lost ground after their earnings reports on Friday.

A clutch of economic data updates are lined up for release, including retail sales and a home builder’s index. Meanwhile investors will hear from the first of several Federal Reserve speakers this week, who may offer further clues on the timing of U.S. interest rate increases.

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What are the main benchmarks doing?

Dow Jones Industrial Average futures YMM8, +0.63%  rose 152 points, or 0.6%, to 24,489, while S&P 500 futures ESM8, +0.62%  added 16.7 points, or 0.6%, to reach 2,674. Nasdaq 100 futures NQM8, +0.66%  gained 47 points, or 0.7%, to hit 6,687.50.

On Friday, the Dow industrials DJIA, -0.50%  fell 122.91 points, or 0.5%, to end at 24,360.14. The S&P 500 index SPX, -0.29%  declined 0.3%, and the Nasdaq Composite Index COMP, -0.47%  lost 0.5%.

For the week, the Dow booked a gain of 1.8%, while the S&P rose 2% and the Nasdaq produced a weekly gain of 2.8%.

What’s driving markets

Relief that the U.S. may not be dragged into a deeper conflict with Syrian allies Russia and Iran was helping drive U.S. stock futures higher and oil prices lower.

The U.S. joined with allies France and Britain to launch missiles on Saturday that destroyed much of Syria’s chemical-weapons capabilities. Worries ahead of that action helped to take some steam out of equities late Friday. But the strikes left much of President Bashar al-Assad’s conventional military facilities intact, easing fears of an escalation in tensions with Russia, a backer of Syria’s regime.

On Sunday, President Bashar al-Assad’s forces unleashed airstrikes against local rebels in what is seen as an intended demonstration of his regime’s continued strength.

Investors may push global concerns such as Syria and a lingering trade spat with China to the side Monday, as they focus instead on earnings from such big names as Bank of America BAC, -2.77% , Netflix Inc. NFLX, +0.78%   and General Electric Co. GE, +2.35%  .

But markets have been fairly tough on companies that have reported so far. Shares of JPMorgan Chase & Co. JPM, -2.71%  , Citigroup Inc. C, -1.55%  and Wells Fargo & Co. WFC, -3.43% all lost ground Friday even after earnings that were either in-line or better than expected. Some say that could be due to concerns that investors think earnings growth has peaked.

Which stocks are in focus?

Ahead of the open, Bank of America Corp. will report results, while Netflix Inc. is due after the close.

Read: Netflix earnings: Another ‘beautiful quarter,’ or are subscriber expectations too high?

And: Tax cuts were supposed to juice the economy, but banks aren’t seeing it

U.S.-listed shares of WPP PLC WPP, +0.49%  could be active after news Chief Executive Officer Martin Sorrell has resigned over a probe into an allegation of personal misconduct.

U.S.-listed shares of Shire PLC SHP, +0.86% SHPG, -3.63%  could be active after the Dublin-headquartered pharmaceutical group announced it will sell its oncology unit to French-based Servier S.A.S for $2.4 billion. Shire said proceeds of the sale could go toward share buybacks.

What are analysts saying?

“Heading into the new trading week, investors across different asset classes feared that the U.S.-led strike on Syria would become the new catalyst to sell risk assets. However, Saturday’s operation, that also included the U.K. and France, was a limited one, and intended to be a one-off as President Trump declared ‘mission accomplished’,” said Hussein Sayed, chief market strategist at FXTM, in a note to clients.

Michael O’Rourke, chief market strategist at JonesTrading, said it is a little worrying that investor expectations are so high running into earnings season, given financials drove much of Friday’s modest S&P 500 losses.

“As companies report earnings, those high expectations are probably the greatest threat to share price performance going forward. If shares continue to be sold off following a company’s good but not great earnings, it will be a negative omen for the broad tape,” said O’Rourke.

What is on the economic docket?

Reports on retail sales in March, with and without autos, are scheduled for release at 8:30 a.m. Eastern Time. Economists polled by MarketWatch forecast a gain of 0.4% for the overall figure, which would mark the first rise in four months.

Read: Americans are spending again after lying low for a few months

The Empire State Manufacturing Survey for April is due at the same time, while the home builders’ index for the same month is scheduled to come at 10 a.m. Eastern. A reading on business inventories in February is expected at 10 a.m. Eastern, too.

It’ll be a busy week for Federal Reserve speakers, with investors hearing from at least 10 officials, including Chicago Fed President Charles Evans and San Francisco President John Williams.

Atlanta Fed President Raphael Bostic is due to give a speech on Monday on the economy and rural market trends to the Shoals Chamber of Commerce in Florence, Alabama, at 12:15 p.m. Eastern Time.

What are other markets doing?

Asian markets surrendered much of an early lead, led by falls for China and Hong Kong over concerns linked to the Hong Kong dollar. European stocks SXXP, -0.06% edged lower.

Read: These cheap European stocks yield up to 8.1%

Gold futures GCM8, -0.03% GCM8, -0.03% inched lower, while the ICE U.S. Dollar Index DXY, -0.32% DXY, -0.32% held steady. Oil prices CLK8, -1.25% pulled back as Syria worries eased somewhat and investors cashed in on some of last week’s big gains.