U.S. stocks opened higher on Wednesday as investors cheered some positive earnings news amid signs of strength in the housing market.
“I think we’ve done enough disseminating of the earnings news here. I think we have a path of least resistance to the upside today,” said Art Hogan, chief market strategist at Wunderlich Securities.
“The nice thing, Coca-Cola was better-than-expected. More important their revenue was better-than-expected, which I think that is a really good sign for multinationals,” said JJ Kinahan, chief strategist at TD Ameritrade.
“What I”m hoping is some of the tech stocks are able to break through that pattern (of earnings beat, revenue miss on the strong dollar) because their products are hard to replicate,” he said, referring to software firms such as Microsoft that reports after the bell tomorrow.
Coca-Cola jumped more than 1 percent after reporting an adjusted 48 cents per share for the first quarter, six cents above estimates, with revenue also above forecasts. Global case volume did fall short of estimates, although the company delivered a better-than-expected quarter in the European market.
McDonald’s spiked more than 3 percent in early trade as investors cheered a turnaround plan expected on May 4. However, the fast food chain’s earnings missed on both the top and bottom lines
Boeing fell nearly 1 percent after reporting earnings of $1.97 per share for the first quarter, above estimates of $1.81. Revenue was slightly shy of forecasts, but the company reaffirmed its full year guidance for both earnings and revenue. Boeing also delivered 184 commercial jets compared to 161 in the year ago quarter, and also met its goal of delivering 30 787 jets during the quarter.
“I would say it’s pretty clear the underlying trends are pretty mixed and I think that is leading the Fed to back away from (the idea that) something will happen in June,” said Maris Ogg, president at Tower Bridge Advisors. “Trends have gotten a lot more mixed beyond currency. At some point earnings are going to have to catch up with stock prices.”
Housing data will also be in focus, with the FHFA house price index for February showing a 0.7 percent increase from the previous month. Analysts polled by Reuters expected a 0.3 percent gain.
Existing home sales data for March at 10:00 a.m. ET is expected to show a second consecutive monthly increase, to just over 5 million, broadly matching the average monthly reading since last summer.
In an encouraging sign that the housing market is picking up, total mortgage application volume rose 2.3 percent week to week on a seasonally adjusted basis for the week ending April 17th, according to the Mortgage Bankers Association (MBA).
The Dow Jones Industrial Average opened up 23 points, or 0.13 percent, at 17,973.
The S&P 500 opened up 2.4 points, or 0.11 percent, at 2,099.
The Nasdaq opened up 10 points or 0.21 percent, at 5,024.
U.S. stocks closed mixed on Tuesday, mostly failing to hold momentum from Monday, as investors reacted to earnings reports. The trend of earnings beats and revenue misses continued after the close, with Chipotle and Yum among those falling short.
European stocks turned lower in morning trade on Wednesday, as investors digested a slew of earnings from European companies.
—CNBC’s Katie Little and Peter Schacknow contributed to this report
On tap this week:
Earnings: AT&T, eBay, Facebook, Petrobras, Qualcomm, F5 Networks, Texas Instruments, Weatherford Intl.
10:00 am: Existing home sales
Earnings: 3M, Amazon.com, Google, Microsoft, Altria, Caterpillar, Dow Chemical, General Motors, Pepsico,Procter and Gamble, Novartis, Eli Lilly, Union Pacific, Hershey, Freeport-McMoRan, KKR, Domino’s Pizza,Johnson Controls, PulteGroup, Dunkin Brands, Raytheon,Starbucks, Capital One, Juniper Networks, Newmont Mining,Southwest Airlines, Pandora
8:30 am: Initial claims
9:45 am: Manufacturing PMI
10:00 am: New home sales
Earnings: Biogen, AstraZeneca, American Airlines Group, Cabot Oil and Gas, State Street, Xerox, A.O. Smith, Tyco
8:30 am: Durable goods