* Brexit deal yet to receive British parliament approval
* Netflix jumps on adding more subscribers
* Morgan Stanley wraps up bank earnings with profit beat
* IBM falls on quarterly revenue miss
* Futures up: Dow 0.24%, S&P 500 0.28%, Nasdaq 0.38% (Adds market action, comments and background)
By Shreyashi Sanyal
Oct 17 (Reuters) - U.S. stocks were on pace to open higher on Thursday, after Britain struck a preliminary last-minute deal with the European Union easing some geopolitical jitters, while upbeat earnings from Netflix and Morgan Stanley affirmed a strong start to the reporting season.
British Prime Minister Boris Johnson said “we have a great new Brexit deal,” lifting the mood across global equities, while he is yet to receive approval for the agreement in a vote at a session of the British parliament on Saturday.
“Although, the agreement reached between the U.K. and EU needs to be approved by the British parliament, the headline news coupled with U.S. earnings should boost market sentiment,” said Peter Cardillo, chief market economist at Spartan Capital Securities in a client note.
Netflix Inc shares jumped 8% in premarket trading, after the video streaming service provider added slightly more paying subscribers than Wall Street expected in the third quarter.
Morgan Stanley gained 3.6% after the big lender beat analysts’ expectations for quarterly profit, buoyed by higher revenue from bond trading and M&A advisory fees.
This followed upbeat results earlier in the week from major U.S. banks JPMorgan Chase & Co, Citigroup Inc, Bank of America and healthcare giants Johnson & Johnson and UnitedHealth Group Inc.
“So far so good. Definitely the bank earnings have been terrific, relative to expectations,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Also supporting sentiment was the Chinese Commerce Ministry saying it hoped to reach a phased agreement in a protracted trade dispute with the United States and cancel tariffs as soon as possible.
Rising uncertainties around the U.S.-China trade war, increasing geopolitical risks and weak domestic economic indicators have recently hit sentiment, with investors now focusing on third-quarter earnings for clarity on these factors impacting Corporate America.
Analysts are expecting S&P 500 third-quarter earnings to fall by 3%, which would mark the first year-on-year contraction since the earnings recession that ended in 2016.
However, of the 43 S&P 500 companies to have posted quarterly results so far, 86% have beaten expectations.
At 8:34 a.m. ET, Dow e-minis were up 64 points, or 0.24%. S&P 500 e-minis were up 8.25 points, or 0.28% and Nasdaq 100 e-minis were up 30.5 points, or 0.38%.
Among other stocks, International Business Machines Corp slipped 6% after it missed quarterly revenue estimates due to weakness in its global technology services unit.
Investors also targeted industrial earnings, which have been a mixed bag so far.
CSX Corp shares rose 2.5% after the railroad operator beat quarterly profit expectations, while peer Union Pacific Corp fell 2.8% on missing earning estimates.
Honeywell International Inc cut its full-year sales forecast, as its customers limited spending amid a slowing global economy. Shares of the diversified manufacturer inched 0.3% higher. (Reporting by Shreyashi Sanyal and Medha Singh in Bengaluru; Editing by Bernard Orr)