NEW YORK, Nov 5 (Reuters) - U.S. stock index futures pointed to a higher open on Wednesday after the Republican Party took control of the Senate in the midterm elections, as expected, and following a report on the labor market that was stronger than expected.
The beaten-down energy sector will be in focus as the Republican majority could lead to new legislative measures that directly affect the group, including approval of oil and gas pipelines and reforms for crude and natural gas export laws.
The group has lagged of late, suffering massive losses as crude oil prices recently fell to a three-year low. The S&P energy index is the only one of the ten primary S&P 500 sectors to be negative for the year.
Futures rose on relief that the election results were clear, with the upcoming Senate majority party not in doubt. Investors had been concerned that some close races would be forced into run-offs, an outcome that could have led to weeks of delay in knowing who would control Congress’s upper chamber.
Midterm elections historically correspond with strong equity returns. According to the Stock Trader’s Almanac, the average gain for the S&P 500 since 1949 during the fourth quarter of a midterm election is 8 percent. The following first-quarter during the midterm portion of the election cycle is also strong, resulting in a two-quarter average gain of 16 percent, the best of the election cycle.
U.S. private employers added 230,000 jobs in October, more than expected and the most since June, according to the ADP National Employment report. The data could raise hopes for Friday’s closely watched payroll report.
In company news, Time Warner Inc rose 4 percent to $78 in premarket trading after it reported revenue growth of 3 percent. Activision Blizzard Inc late Tuesday raised its full-year forecast, sending shares up 5.3 percent to $21 before the bell.
FireEye Inc fell 16 percent to $28.64 in heavy premarket trading a day after the cybersecurity company gave a revenue outlook that was largely below expectations. TripAdvisor Inc dropped 12 percent to $73.90 before the bell a day after posting weaker-than-expected earnings.
Futures snapshot at 8:28 a.m.:
* S&P 500 e-minis were up 13 points, or 0.65 percent, with 202,609 contracts changing hands.
* Nasdaq 100 e-minis were gaining 28.5 points, or 0.69 percent, in volume of 31,818 contracts.
* Dow e-minis were up 95 points, or 0.55 percent, with 33,595 contracts changing hands. (Additional reporting by Chuck Mikolajczak; Editing by Bernadette Baum)