US pre-open: Stocks seen higher; Nasdaq to outperform on Facebook earnings

US futures pointed to a firmer open on Wall Street on Thursday, with the tech-heavy Nasdaq likely to outperform following a solid set of earnings from Facebook.

At 1130 BST, Dow Jones Industrial Average futures were up 0.1%, while S&P 500 and Nasdaq futures were 0.2% and 0.5% higher.

Facebook shares rose 4% in pre-market trade after the company said late on Wednesday that second-quarter profits surged 71% to $3.9bn while revenue increased 44.8% to $9.32bn.

Oanda analyst Craig Erlam said: "Earnings season has arguably taken on additional importance this quarter due to the inability of Donald Trump to, so far, deliver on the growth agenda that won him the White House back in November. While US Treasury yields have come off their post-election highs and the dollar has fallen to a more-than one year low, the three major stock indices - which are up around 20% since early November - continue to trade at record highs.

"Even in the absence of tax cuts and fiscal stimulus, corporate America has continued to perform well as is once again evident in this seasons results, with companies exceeding expectations on both the top and bottom line. With so many companies reporting today - 73 of those on the S&P 500 - a continuation of this performance could see more record highs being registered in the US, even as investors continue to question whether there remains value in the country compared to other areas such as Europe."

In currency markets, the dollar was under pressure against the pound after the Federal Reserve said on Wednesday that it would start implementing balance sheet normalisation "very soon".

"While the Fed did suggest that the unwinding of its balance sheet will begin relatively soon, it also repeatedly referred to inflation running below target, a concern that has been highlighted by policy makers in recent months. With traders already not convinced that we’ll see another rate hike this year, these statements don’t do anything to change that," Erlam said.

The dollar was down 0.2% versus the pound at 0.7606, but up 0.2% against the euro and the yen at 0.8539 and 111.35, respectively.

Earnings were due before the opening bell from Twitter, Southwest Airlines, Dow Chemical, United Parcel and Mastercard. After the close, Amazon, Expedia, Intel, Mattel and Starbucks were slated to report.

Elsewhere, PayPal gained ground in pre-market trading after better-than-expected quarterly earnings and as it lifted its outlook.

On the data front, initial jobless claims are at 1330 BST, along with the goods trade balance, wholesale inventories and durable goods orders.