By Sruthi Shankar and Ankika Biswas
(Reuters) - Wall Street was set for a strong open on Thursday as better-than-expected results from Meta Platforms, Eli Lilly (NYSE:LLY) and Comcast outweighed data showing the U.S. economy slowed more than anticipated in the first quarter.
Meta Platforms Inc soared 14.6% in premarket trading as it forecast quarterly revenue above estimate, with CEO Mark Zuckerberg saying that Artificial Intelligence was increasing traffic to Facebook (NASDAQ:META) and Instagram and boosting ad sales.
Shares of social media platforms Snap Inc (NYSE:SNAP) and Pinterest Inc rose around 4% each.
Meta is the second best performer among the S&P 500 stocks with a 74% gain so far this year, next only to Nvidia Corp.
Eli Lilly and Co advanced 3.1% on raising its full-year profit forecast, while Merck & Co gained 2.3% on better-than-expected first-quarter results.
Comcast Corp (NASDAQ:CMCSA) rose 4.9% as it beat estimates for quarterly revenue and profit, thanks to sustained demand for its broadband services and higher theme park attendance.
Raising worries about the economy, gross domestic product (GDP) increased at a 1.1% annualized rate last quarter, the Commerce Department said in its advance estimate for first-quarter growth, while economists polled by Reuters had estimated a 2.0% expansion.
"January was really the standout month and since then we've seen weakness in February and March, which has really been slowly dragging down the economy," said Brian Klimke, investment director at Cetera Investment Management.
"If we're looking to the future, data does seem to be continuing to weaken. The good news is we do think a recession could be mild."
Despite the slowdown, which mostly reflected a drag from weak inventory investment, the Federal Reserve is expected to raise interest rates by another 25 basis points next week.
A separate report showed initial claims for state unemployment benefits decreased 16,000 to a seasonally adjusted 230,000 for the week ending April 22. Economists had expected 248,000 claims in the latest week.
The decline in first-quarter earnings is estimated to be smaller than analysts had expected at the start of the month, with a host of tech names such as Microsoft Corp (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) reporting upbeat results this week.
Analysts expect first-quarter earnings to drop 3.2% year-over-year for S&P 500 companies versus a 5.1% decline forecast earlier.
Amazon.com Inc (NASDAQ:AMZN) and Intel (NASDAQ:INTC) are among the big names set to report after markets close.
The S&P 500 closed at near one-month low on Wednesday after lingering concerns about a weakening U.S. economy were exacerbated by a fresh plunge in First Republic Bank's shares after a report said the U.S. government was unwilling to engineer its rescue.
At 8:57 a.m. ET, Dow e-minis were up 163 points, or 0.49%, S&P 500 e-minis were up 23.5 points, or 0.58%, and Nasdaq 100 e-minis were up 133.75 points, or 1.04%.
The U.S. House of Representatives on Wednesday narrowly passed a bill to raise the government's $31.4 trillion debt ceiling that includes sweeping spending cuts over the next decade. The bill is expected to get stalled in the Senate.
EBay Inc climbed 2.6% after the e-commerce company forecast current-quarter revenue above projections.