Wall Street set to open higher on Apple rally; Fed in focus

By Yashaswini Swamynathan

REUTERS - Wall Street looked set to open higher on Wednesday, in a bright start to the month, buoyed by strong earnings from Apple, while investors awaited the Federal Reserve's decision on interest rates.

Investors are closely tracking quarterly earnings to support valuations, especially after a post-election rally pushed Wall Street to record highs.

Apple's shares were up 4.40 percent at $126.69 in heavy premarket trading after the company's earnings and iPhone sales blew past expectations in the latest quarter.

"With a bellwether company such as Apple reporting an encouraging set of numbers, it has brought the focus of investors back on company fundamentals," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

While Apple is set to open at its highest level since July 2015, shares of other technology heavyweights also gained. Facebook, which is expected to report after markets close, was up 1.24 percent. Alphabet, Microsoft and Nvidia were also up.

The Fed is expected to keep interest rates unchanged in its first policy meeting after President Donald Trump took office as the central bank seeks greater clarity on his economic policies.

However, investors will parse the Fed's policy statement, expected at 2:00 p.m. ET (1900 GMT), for any changes following a string of strong economic data.

Boosting investor sentiment was a report that showed U.S. private employers hired 246,000 people in January, far exceeding the 165,000 that economists had expected. The report acts as a precursor to the more comprehensive nonfarm payrolls report due Friday.

Dow e-minis were up 63 points, or 0.32 percent at 8:22 a.m. ET, with 19,403 contracts changing hands.

S&P 500 e-minis were up 7 points, or 0.31 percent, with 117,061 contracts traded.

Nasdaq 100 e-minis were up 33.25 points, or 0.65 percent, on volume of 24,162 contracts.

Trump's comments and decisions are also on investors' crosshairs, especially after he placed curbs on travel to the United States, a move that unleashed uncertainty on Wall Street and declines in the past few days.

"Trump is a wild card and someone who can say something at any given time and drive the markets into short-term disarray," Bakhos said.

The S&P 500 and the Dow Jones Industrial Average fell on Tuesday amid concerns over the Trump administration's priorities. The Nasdaq Composite index managed to get a lift from biotech stocks after Trump promised to ease regulations in the pharmaceutical industry.

Apple's influence extended to other parts of the technology industry. Apple suppliers Cirrus Logic, Skyworks Solutions were up more than 2 percent premarket.

Oneok Partners jumped 28 percent to $55.24 after biggest shareholder Oneok Inc said it would buy the rest of the company for $9.3 billion.

A reading from the Institute of Supply Management will likely show that the U.S. manufacturing activity index rose to 55 in January from 54.5 the previous month. The data is due at 10:00 a.m. ET.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila)