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* China service sector activity rises to 3-mth high
* Activision Blizzard rises on BMO upgrade
* Tyson Foods falls on cutting FY profit forecast
* Futures up: Dow 0.88%, S&P 0.89%, Nasdaq 1.03%
(Updates market action, adds comments)
By Uday Sampath Kumar
Sept 4 (Reuters) - U.S. stocks were set to open higher on
Wednesday after encouraging data from China allayed concerns of
slowing global growth, with sentiment getting a boost from
easing of tensions in Hong Kong following the withdrawal of a
controversial bill.
A private survey showed activity in China's services sector
expanded at the fastest pace in three months in August, a boost
to the world's second-largest economy struggling to reverse a
prolonged slump in its manufacturing sector. Hong Kong leader Carrie Lam on Wednesday withdrew an
extradition bill that had triggered months of often violent
protests.
Wall Street's three major indexes fell on Tuesday after the
United States and China imposed new tariffs on each other's
goods over the weekend and on data showing weak U.S. factory
activity in August. "The positive economic news out of China is offsetting the
weak manufacturing data from the U.S. yesterday and diminishes
the fear of an economic downturn," said Shawn Gibson, chief
investment officer at asset management firm Liquid Strategies.
"Global growth and not just U.S. growth is a very important
narrative for investors because a strong Chinese economy is
important to our economy as well," Gibson added.
Markets struggled last month as escalating trade tensions
and the inversion of a key part of the U.S. yield curve, often
seen as a sign of recession, drove investors away from risky
assets and pushed the S&P 500 .SPX to log its worst August in
four years.
The benchmark is now 4% away from its record high hit in
late July.
Intel Corp INTC.O , Qualcomm Inc QCOM.O and Micron
Technology Inc MU.O rose between 1.1% and 3% in premarket
trading.
Goldman Sachs Group Inc (NYSE:GS) GS.N , Bank of America Corp (NYSE:BAC) BAC.N
and JPMorgan Chase (NYSE:JPM) & Co JPM.N were also trading higher.
UBS slashed its forecasts for world growth and government
bond yields, predicting 10-year U.S. Treasury yields, the
benchmark for global borrowing costs, would end the year at just
1%. Gibson said the nonfarm payrolls report due Friday is
anticipated to be the most important jobs data in a while,
because any sort of weakness could push Treasury yields even
lower and signal that bond investors are concerned about an
upcoming recession.
At 8:45 a.m. ET, Dow e-minis 1YMcv1 were up 229 points, or
0.88%. S&P 500 e-minis EScv1 were up 26 points, or 0.89% and
Nasdaq 100 e-minis NQcv1 were up 78.25 points, or 1.03%.
Among other stocks, Activision Blizzard Inc ATVI.O gained
2.8% after brokerage BMO Capital Markets upgraded the videogame
publisher's stock to "outperform."
Tyson Foods Inc (NYSE:TSN) TSN.N shares fell 3.7%, after the United
States' biggest meat processor cut its 2019 earnings forecast.
Shares of American Eagle Outfitters (NYSE:AEO) Inc AEO.N fell 9%
after the apparel retailer forecast third quarter earnings below
estimates. Data showed the U.S. trade deficit narrowed slightly in July
as exports rebounded, but the gap with China surged to a
six-month high.