By Will Horner
U.S. stock futures rose Wednesday, with big technology stocks poised to erase some of this week's losses.
Futures tied to the Dow Jones Industrial Average advanced 0.6%, setting up the blue-chip index for a third consecutive day of gains. Contracts linked to the S&P 500 climbed 0.7%, a day after it slid 0.1%. The mixed picture from Tuesday reflects investors rotating out of this year's best-performing growth stocks and into cyclical sectors such as manufacturing and energy.
Futures linked to the Nasdaq-100 climbed 1%, signaling a potential recovery in the tech sector after the opening bell. Facebook, Apple, Amazon.com, Netflix and Google parent Alphabet -- the so-called FAANG stocks -- and Microsoft edged higher in premarket trading.
Most of those stocks, which powered markets higher through 2020, took a drubbing earlier this week as investors cheered progress toward a Covid-19 vaccine and turned their focus to stocks that had fared poorly.
"What we are seeing now is the classic saying that in the short term, the market is a voting machine, and in the long term, it is a weighing machine," said Altaf Kassam, European head of investment strategy and research at State Street Global Advisors. "What we saw in the tech sector was that it was the FAANGs that bore the brunt of the sell off, but more broadly, tech didn't do that bad. That was the knee-jerk reaction."
The rollout of a Covid-19 vaccine is likely to power the global economic recovery and lift stocks across sectors, giving momentum to a new leg of the market's rally, investors said.
"There is still a lot of money on the sidelines," according to Mr. Kassam. "With the optimism that the vaccines could now come, [that] means that some of that money could start to drift back in."
Still, some investors are focusing on the hurdles facing making a vaccine widely available, and questions about the size of the next fiscal stimulus package. Coronavirus hospitalizations set a record in the U.S. on Tuesday in a fresh reminder that the pandemic is far from over.
"What you are seeing over the last 24 hours is a tug of war between those who see the vaccine as a close-your-eyes moment and those who want to look at the risks now," said Jim McCormick, global head of desk strategy at Natwest Markets. "At the moment, the former group is winning."
In premarket trading, Lyft shares rose over 5% after the ride-hailing company's revenue and number of active riders climbed as lockdowns eased in some cities. Cloud-monitoring company Datadog shares dropped by more than 7% after it reported a third-quarter loss.
U.S. bond markets are closed Wednesday for Veterans Day. The yield on 10-year Treasurys has climbed for four straight days and ended Tuesday at 0.970%, its highest since March 19.
The ICE U.S. Dollar index, which tracks the greenback against a basket of currencies, ticked up 0.4%.
In commodities, oil prices extended their advance. Brent crude oil, the international benchmark, rose 2.5% to $44.74 a barrel. Data from the American Petroleum Institute late Tuesday showed a large drop in U.S. crude oil stockpiles, adding to the bullish sentiment on oil.
Overseas, the pan-continental Stoxx Europe 600 rose 1%, led by the health-care, real estate and utility stocks.
Major Asian equity benchmarks ended the day on a mixed note. Japan's Nikkei 225 Index rose 1.8% to close at its highest level since 1991. South Korea's Kospi rose 1.4% to its highest in over two years.
The main benchmarks in both Hong Kong and China ended the day lower. Shares in some of China's biggest tech companies fell sharply for a second day.
The move echoed a pullback in U.S. tech stocks on Tuesday, and came after China released new draft antimonopoly rules for online platforms. The rules signaled an increased appetite by Beijing authorities to rein in its dominant technology companies.
Hong Kong-traded shares in Alibaba, Tencent, Meituan and Xiaomi dropped between 7.4% and 9.8%.
Write to Will Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
11-11-20 0908ET
