Here are the most important news, trends and analysis that investors need to start their trading day:
1. Wall Street tries to keep its rebound rally going
Dow futures rose Wednesday as Wall Street tried to keep its rebound rally going. However, earlier gains were cut sharply and Nasdaq futures slipped. The Dow Jones Industrial Average jumped 549 points, or 1.6%, on Tuesday after starting the week with a 725-point rout. The S&P 500 and Nasdaq both recovered more than 1.5%. The delta variant-driven surge in new daily Covid cases in the U.S. and around the world has put investors on edge. As of Tuesday’s close, all three stock benchmarks were still over 1% away from last week’s record closes. Adding to swings in stocks this week, the 10-year Treasury yield bounced off Tuesday’s 5½-month lows of nearly 1.13%, trading early Wednesday around 1.25%. Bitcoin climbed back above $30,000, rebounding after a sell-off in cryptocurrencies.
2. Johnson & Johnson, Coca-Cola beat on earnings, revenue
Dow stock Johnson & Johnson rose about 1% in premarket trading after the U.S. drug maker Wednesday delivered better-than-expected earnings of $2.48 per share in the second quarter. Revenue of $23.31 billion also beat. J&J expects to sell $2.5 billion of its one-shot Covid vaccine this year, even as concerns mount over its effectiveness against the delta variant. A new NYU study suggests that people who got the J&J vaccine get a second shot of it or a booster of the Pfizer or Moderna vaccines.
Shares of Dow component Coca-Cola jumped about 2% in the premarket after the beverage giant early Wednesday reported better-than-expected earnings of 68 cents per share. Revenue of $10.13 billion also exceeded forecasts. Sales surpassed 2019 pre-Covid levels, prompting the company to raise its full-year outlook.
Verizon, also a Dow stock, added about 1.5% in premarket trading, after the company on Wednesday beat estimates by 7 cents with adjusted quarterly profit of $1.37 per share. Verizon also reported better-than-expected revenue and subscriber growth, and raised its full-year outlook.
3. Netflix beats on paid subscriber growth, but misses on earnings
Shares of Netflix were flat in the premarket. The stock initially dropped in extended hours trading Tuesday after the video streaming giant missed estimates with second-quarter earnings of $2.97 per share. Revenue of $7.34 billion basically matched forecasts. Global paid net subscriber additions of 1.54 million beat expectations. Netflix also confirmed a push into gaming. The company recently hired video-game executive Mike Verdu from Facebook. Netflix will be able to differentiate its gaming offerings because of its vast bank of intellectual property, COO Greg Peters said during the firm’s earnings call.
4. United plans to ramp up flights to meet strong demand
Shares of United Airlines gained about 1% in Wednesday’s premarket, the morning after the carrier matched estimates with a second-quarter loss of $3.91 per share. Revenue beat expectations and quadrupled to $5.47 billion, thanks to a resurgence in air travel following last year’s pandemic-induced collapse in demand. Sales were still down 50% from 2019 levels. United expects to generate positive adjusted pretax income for the third and fourth quarters and plans to ramp up flights. Last week, Delta Air Lines and American Airlines also said they’ve seen an improvement in bookings and financial results.
5. WHO chief warns about ‘early stages of another wave’
The world is in the “early stages of another wave” of Covid infections and death, World Health Organization Director-General Tedros Adhanom Ghebreyesus said Wednesday. Speaking to International Olympic Committee members in Tokyo, Tedros also called on the world’s leading economies to share vaccines. With the Games set to open Friday, after being delayed a year, Tokyo’s new Covid infections surged to a six-month high Wednesday. Olympics organizing chief Toshiro Muto on Tuesday refused to rule out canceling the games if coronavirus cases spiked. A spokesperson later said organizers were “concentrating 100% on delivering successful Games.”
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