Stock market news live updates: Stock futures drift higher ahead of jobless claims, earnings - Yahoo Finance

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Stock futures opened slightly to the upside Wednesday evening as investors awaited more earnings and data on the labor market's recovery.

Contracts on the S&P 500 traded a tick above the flatline. The blue-chip index had ended the day in the red, pulling back from Tuesday's record closing high. The Dow also ended lower, while the Nasdaq eked out a higher close.

Some of the closely watched companies that reported earnings results after market close on Wednesday disappointed relative to Wall Street's consensus estimates, punctuating what has otherwise been an exceptionally strong second-quarter earnings season. Ride-hailing giant Uber (UBER) posted a wider-than-expected adjusted EBITDA loss for the second quarter, a day after smaller rival Lyft (LYFT) unexpectedly reported an adjusted profit during the same period. And shares of Etsy (ETSY) sank after the company delivered a current-quarter sales forecast that came in short of estimates, vindicating many traders' fears over a sharp slowdown in e-commerce growth during the second half of this year.

Aside from these blips, however, most major companies have posted second-quarter results that exceeded estimates. As of last Friday, 59% of S&P 500 companies had posted results, and 88% of these had beaten Wall Street's earnings per share estimates, according to FactSet's latest data. The expected earnings growth rate for S&P 500 companies is tracking toward 85.1%, which would be the biggest jump since the fourth quarter of 2009.

"The near-term power behind the market is insanely strong earnings. There's very little sign that they're not going to continue to be strong through the end of the year and into next year," Jonathan Golub, chief U.S. equity strategist for Credit Suisse, told Yahoo Finance on Wednesday. "But you are starting to see maybe cracks on the edge, if you will, that are making this a little more difficult. And where it's showing up is not in the market overall, but in the sectors and the groups of stocks and that leadership, and there's a bit more rotation going on there."

Over the past month, defensive sectors including utilities and healthcare have outperformed as concerns over the spread of the Delta variant resurged. For the year-to-date, however, the cyclical sectors of the S&P 500, including energy and financials, have remained the major outperformers, consistent with investors' convictions that this year would be one of recovery for the broader economy relative to last year's lows.

Interest rates also dipped again on Wednesday, with the benchmark 10-year yield briefly reaching the lowest level in six months at under 1.13%. The move lower coincided with more concerning signals on the pace of the economic recovery, with private payrolls rising by just 330,000 in July, or less than half the consensus estimate, according to ADP's latest monthly report on Wednesday. Still, however, over recent data have been more positive, with the Institute for Supply Management's July services index jumping to a record high even as company survey respondents cited ongoing supply chain disruptions and shortages.

"We've got some difficulty in logistical challenges, we have some inflation that's causing some indigestion at the moment," Michael Vogelzang, Captrust chief investment officer, told Yahoo Finance on Wednesday. "But specifically the Delta variant of COVID-19 is actually potentially positive for the stock and bond markets, mostly because yes it may induce a bit of a slower economy, but frankly the economy is booming and it wouldn't be the end of the world to slow it down a bit. But it also might give the central banks around the world a little more cover to continue to provide some more liquidity than what I think the market's been expecting. That could actually accelerate or extend some of the bull market action."

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