Dow Jones Expected to Trade Higher on Earnings
The Dow Jones Industrial Average closed in the red on Tuesday as Brexit and China concerns loomed large on the stocks. Moreover, the market participants are also concerned about the policies of the incoming Trump administration and have less clarity on how things will turn out.
DJIA closed at 19,826.77 on Tuesday after losing 58.96 points.
After posting record highs in the previous week, the Nasdaq Composite lost 35.39 points to close at 5,538.73. The S&P 500 Index closed at 2,267.89 after losing 6.75 points.
Few important earnings announcements are lined up for the stock market today and the market may regain its upward momentum. Citigroup Inc (NYSE:C), Goldman Sachs Group Inc (NYSE:GS), and Netflix, Inc. (NASDAQ:NFLX) will announce their results today.
Stocks to Watch Today
QUALCOMM, Inc. (NASDAQ:QCOM)
QCOM stock lost over four percent in the last trading session and closed at $64.19. The news came in that the United States Federal Trade Commission has sued Qualcomm for employing anti-competitive practices to maintain its top position in selling modems for devices like smartphones.
However, Qualcomm stock is up almost 1.4% in pre-market trades. The company has stated in its official statement that it will vigorously contest complaint and defend its business practices. Qualcomm further added that the complaint is based on a flawed legal theory. (Source: “Qualcomm Responds to Complaint from U.S. Federal Trade Commission,” QUALCOMM, Inc., January 17, 2017.)
There are doubts surrounding the Qualcomm-NXP deal as well, given Donald Trump’s stand against China, which is being seen as a potential factor that could derail the deal. The focus is on what policies are introduced by the Trump administration following Inauguration Day.
Wal-Mart Stores Inc (NYSE:WMT)
WMT stock gained 1.92% in the last trading session to close at $68.42. The retailer made the announcement that it would add 10,000 jobs this year. However, this is a part of the $6.8-billion capital spending plan that the company had announced in October. But companies have become more vocal now about their hiring and investment plans as Donald Trump has been openly targeting companies on Twitter about their outsourcing plans.
As Inauguration Day comes near, companies find it prudent to share such plans to convey to the new administration that they favor the jobs policy of Donald Trump. However, Wal-Mart is also facing the challenge of growth in online retail, which is the area dominated by its rival Amazon.com, Inc. (NASDAQ:AMZN). Wal-Mart stock is trading lower by more than one percent in pre-market.
Netflix, Inc. (NASDAQ:NFLX)
The video streaming giant is set to announce its results after market close and NFLX stock may see some fluctuations after losing about 0.6% in the last trading session. Investors and analysts are bullish on Netflix stock as they expect the company to post strong growth in subscriber numbers.
However, in case of a miss, NFLX stock is likely to take a big hit. The company had announced big plans to invest in international growth last time and there are concerns around how this would impact the profitability. NFLX stock is trading slightly up in the pre-market session.
As the competition grows, Netflix will rely more and more on original programming and local language support, which could give it a lead in international markets. As the growth in the U.S. market slows, global growth holds the key for Netflix stock.