Wall Street set to open higher as earnings season picks up

By Yashaswini Swamynathan

REUTERS - U.S. stocks looked set to open slightly higher on Wednesday as investors assessed bank earnings and economic data, while awaiting Federal Reserve Chair Janet Yellen's speech.

Shares of Goldman Sachs were up 0.5 percent at $237 in premarket trading after the bank reported a nearly four-fold rise in quarterly profit. Citigroup edged up after posting a 7 percent rise in profit.

Investors are also awaiting President-elect Donald Trump's inaugural speech on Friday to gain insight into his plans for the U.S. economy.

"There is a lot of uncertainty hovering over the market, regarding what policies will be implemented," said Quincy Krosby, market strategist at Prudential Financial.

"But the market appears to be giving the President-elect the benefit of doubt."

The Trump rally, which drove Wall Street to record highs, has been showing signs of fatigue since the start of the year as investors get increasingly nervous about his unconventional approach to trade and politics.

U.S. stocks closed lower on Tuesday, with some of the biggest beneficiaries of the post-election rally including banks and transport companies shedding some of their gains.

Dow e-minis were up 33 points, or 0.17 percent at 8:35 a.m. ET (1335 GMT), with 23,992 contracts changing hands.

S&P 500 e-minis were up 4 points, or 0.18 percent, with 117,642 contracts traded.

Nasdaq 100 e-minis were up 9.25 points, or 0.18 percent, on volume of 18,430 contracts.

A report from the U.S. Labor Department showed the Consumer Price Index edged up 0.3 percent in December, leading to the largest year-on-year increase in 2-1/2 years, a sign that inflation pressures could be building.

Investors are also eyeing Janet Yellen's speech at 3:00 p.m. ET to see if she will echo a growing opinion among policymakers that fiscal stimulus under the Trump administration may call for more aggressive interest rate hikes.

A reading on December industrial output and a report on the housing market are also scheduled for the day.

Target dropped 3.4 percent to $68.55 after the big-box retailer reported a decline in sales during the holiday season and cut its fourth-quarter earnings forecast. Shares of bigger rival Wal-Mart were off 1.2 percent. CoLucid Pharmaceuticals surged 32.7 percent to $46.30 after Eli Lilly said it would buy the drugmaker for about $960 million. Lilly's stock was up 0.3 percent.

Gigamon dropped 22.6 percent to $34.10 after the network traffic management software maker estimated its fourth-quarter revenue to fall below its previous forecast.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)