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Meta jumps on $40 billion share buyback

Honeywell pushes Dow futures lower on Q4 miss

Merck slides on disappointing forecast

U.S. weekly jobless claims fall unexpectedly

Futures: Nasdaq up 1.70%, S&P up 0.71%, Dow down 0.08%

Adds comments, details; updates prices

By Shreyashi Sanyal and Johann M Cherian

Feb 2 (Reuters) – Nasdaq futures jumped on Thursday as Meta Platforms surged on rigorous cost controls, while a dovish message from Federal Reserve Chair Jerome Powell boosted bets of a softer landing for the U.S. economy.

Meta Platforms IncMETA.O jumped 19.1% in premarket trading, after the Facebook-parent announced a new $40 billion share buyback and said it would cut costs in 2023 by $5 billion to between $89 billion and $95 billion.

Shares of other growth companies including Apple Inc AAPL.O, Alphabet Inc GOOGL.O and Amazon.com Inc AMZN.O rose between 1.5% and 4.9%. The three companies are slated to report quarterly results after market close.

“It certainly seems that markets are up because earnings for Meta were surprisingly positive,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

“Investors are also encouraged by the fact that the Fed is sort of tempting that it’s done or close to being done with its rate tightening program.”

Wall Street’s main indexes got a boost in the previous session as Powell acknowledged that inflation was starting to ease after the U.S. central bank raised rates by 25 basis points.

Powell’s comments relieved investors that a U.S. recession, which has been widely priced in, will likely be mild.

Data showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, highlighting that the labor market’s resilience, ahead of nonfarm payroll numbers on Friday.

After a bruising 2022, U.S. stock markets have made a strong start to the year, with megacap companies gaining on hopes that the Fed will ease its hawkish monetary policy stance, which in turn could alleviate some pressure off their valuations.

At 8:44 a.m. ET, Dow e-minis 1YMcv1 were down 28 points, or 0.08%, S&P 500 e-minis EScv1 were up 29.25 points, or 0.71%, and Nasdaq 100 e-minis NQcv1 were up 211 points, or 1.7%.

Dow S&P 500 futures were weighed down by Honeywell International IncHON.O that fell 3.3% on posting a 28.6% fall in quarterly profit, hurt by supply chain constraints.

Drugmaker and fellow Dow component Merck & Co’sMRK.N, slid 1.2% on a lower-than-expected annual forecast, while Eli Lilly & CoLLY.N fell 2.4% on missing quarterly revenue estimates.

Align Technology Inc ALGN.O surged 18.2% on its first quarterly results beat in a year, driven by demand for its orthodontic treatments.

As many as 70% of the 200 companies in the S&P 500 that had reported fourth-quarter earnings as of Wednesday have topped Wall Street expectations. Analysts now see earnings of S&P 500 firms declining 2.4% for the quarter, according to Refinitiv estimates.

(Reporting by Shreyashi Sanyal and Johann M Cherian in Bengaluru; Editing by Saumyadeb Chakrabarty and Vinay Dwivedi)

((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.