Wall Street set to rise on earnings despite Delta worries

On Tuesday, Wall Street was set to rise as an upbeat corporate earnings season, and a pickup in global deals activity lifted demand for risky equities. However, gains were capped by concerns around a surge in the Delta variant of the coronavirus.

Shares of Dupont rose 2.2% in premarket trading after the maker of the industrial material raised its full-year forecast for a second time.

Stronger-than-expected profit reports have ratcheted up already high forecasts of second-quarter results for Corporate America, with earnings now estimated to have climbed about 90% versus forecasts of 65.4% at the start of July, according to IBES data from Refinitiv.

Still, the three main U.S. stock indexes have slipped from record highs as investors booked profits amid lofty stock valuations and as concerns over slowing economic growth and rising cases of the Delta variant hit sentiment.

A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri/File Photo

“Investors are not willing to sell at current levels but are also not willing to commit to fresh capital due to rising COVID-19 cases and a possible change in taxes, which could lead the market to trade quite range-bound,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

A deepening regulatory crackdown in China has also sent jitters across the global technology sector. China’s Tencent Holdings Ltd slumped as much as 10% in Asia after a Chinese state media outlet branded online games as “spiritual opium.”

Shares of U.S.-listed gaming companies, including Activision Blizzard Inc and Take-Two Interactive Software Inc, inched lower by 08:23 a.m. ET.

Dow e-minis were up 95 points, or 0.27%, S&P 500 e-minis were up 9.75 points, or 0.22%, and Nasdaq 100 e-minis were up 20.75 points, or 0.14%.

Bond yields steadied after weaker-than-expected manufacturing data in the previous session sent them to their lowest since July 20. Shares of major U.S. banks, which generally track bond yields, also inched higher in early deals.

Focus on Tuesday will be on factory orders for June, while later in the week, traders will turn to data on the U.S. services sector and the monthly jobs report for July.

In M&A-driven moves, Translate Bio surged 29.4% after France’s Sanofi agreed to buy the U.S. biotech company in a $3.2 billion deal.

Industrial firm Cummins Inc gained 1.3% as it said it would explore options for its unit, which makes filters, coolant, and chemical products.

Under Armour, Inc jumped 6.1% after raising its annual revenue forecast.

On the other hand, Drugmaker Eli Lilly and Co slipped 1.9% as it reported a 2% drop in quarterly profit.

(Reporting by Sagarika Jaisinghani and Shashank Nayar in Bengaluru; Editing by Arun Koyyur)