US open: Stocks hit new record highs on solid earnings

US stocks rose on Wednesday morning in New York as investors digested a barrage of corporate earnings and stimulus measures to boost China’s economy.

The Dow, which fell slightly on Tuesday, rebounded 0.3% in early deals and was on track to hit a fresh record high, trading at around 38,031; the S&P 500 was set to break another peak, rising 0.6% to 4,892; while the Nasdaq was rising 0.7% to 15,536.

“The three main US stock indices all looked very overbought as we approached the 2023 year-end. But the pull-back we saw at the beginning of this year helped to reset markets by offering frustrated buyers an opportunity to get long at more attractive levels,” said analyst David Morrison from TradeNation.

“As things stand, bad news is being shrugged off and good news handsomely rewarded.”

Markets across Asia and Europe were broadly higher on Wednesday after China's central bank said it would cut the amount of cash lenders must hold in the latest move designed to bolster the country’s ailing economy. Pan Gongsheng, governor of the People’s Bank of China, said the reserve requirement ratio would be trimmed for all banks from 5 February, by 50 basis points to 10%.

Meanwhile, on Tuesday, Beijing said it was considering a £220bn rescue package for Chinese stock markets, which have struggled compared to other benchmarks worldwide.

Also helping sentiment on Wall Street were Netflix and Freeport-McMoRan which impressed the market with their quarterly figures.

Netflix, which published its quarterly results after the bell on Tuesday, was up 13% as the streaming giant reported that subscriber numbers increased by 13.1m in the fourth quarter to 260.3m, as revenue growth of 12.5% year-on-year beat analysts' forecasts. Futures were up nearly 10%

“Netflix’s latest numbers shake off any suggestion the company is struggling to find new ways to grow. It has seen a big jump in the number of subscriptions and its original content is proving to be popular with consumers, even receiving 18 Oscar nominations this week across 10 of its original content films," said AJ Bell investment director Russ Mould.

Miner Freeport-McMoRan jumped over 5% after the fourth-quarter year-on-year decline in earnings wasn’t as bad as feared: EPS fell to 27 cents from 48 cents a year earlier, better than the 23 cents forecast. Sales were up 2.6% at $5.91bn, also higher than expected, due to rising copper demand and higher gold prices.

On the downside, AT&T and Abbott Laboratories were both trading in the red after releasing their numbers. Meanwhile, Tesla, IBM and Lam Research were all in focus with their earnings scheduled after the closing bell.