Stocks pointed to a lower opening in the U.S. on Wednesday, as a mixed batch of earnings reports led some traders to take profits after two weeks of gains in the Dow Jones industrials.
Wall Street will likely be focusing on the technology sector Wednesday, after Yahoo Inc. disappointed investors late Tuesday by posting a surprising 11 percent drop in its first-quarter profit. Also making investors shudder, International Business Machines Corp. indicated late Tuesday in its earnings report that U.S. sales are poor, and Motorola Inc. on Wednesday reported a loss in the first quarter, hurt by lower-than-expected mobile phone sales and charges.
Not all news was bad on the technology front: chip maker Intel Corp.'s profit surpassed expectations late Tuesday. Also, the companies that make up the Dow - nearly half of which report earnings this week - have been mostly beating the Street's predictions.
On Wednesday, JPMorgan Chase & Co. reported a 55 percent jump in profits that far surpassed Wall Street's expectations, while United Technologies Corp. also reported a profit rise that beat forecasts.
With a slim schedule of economic data Wednesday, investors will be eyeing earnings reports. On Tuesday, a tame consumer inflation reading and an increase in home construction helped push the Dow to its 13th gain out of 14 trading sessions.
Ahead of Wednesday's market opening, Dow futures expiring in June fell 20.00, or 0.16 percent, to 12,806. The Standard & Poor's 500 index futures fell 5.10, or 0.34 percent, to 1,473.90, and Nasdaq 100 futures fell 12.25, or 0.66 percent, to 1,840.00.
On Tuesday, the Dow briefly surpassed its record close, reached Feb. 20, of 12,786.64, and the S&P closed at a new six-and-a-half-year high. The Nasdaq fell, though, as did the Russell 2000 index of smaller companies - however, the Russell briefly hit a record in earlier trading.
Oil prices slipped Wednesday, with a barrel of light sweet crude falling 32 cents to $62.79 a barrel in premarket trading on the New York Mercantile Exchange. The energy markets were awaiting the U.S. government's weekly oil inventory report. If the report shows dwindling crude or gasoline stockpiles, prices would likely resume their climb - which could rekindle worries about high inflation compelling the Federal Reserve to boost interest rates.
Gold prices edged higher. The dollar fell against most major currencies, nearing all-time lows against the euro and trading at new 15-year lows against the British pound.
The dollar has been weakening because U.S. interest rates have remained steady since the summer, and because the U.S. economy is slowing. Investors are expecting that cooling growth to be reflected in this week's earnings reports; the S&P has predicted that companies in the S&P 500 index grew less than 4 percent in the first quarter, much less than in previous quarters.
Late Tuesday, Yahoo Inc.'s stock plummeted in after-hours trading when it said its first-quarter profit fell 11 percent to $142.4 million (EUR105.1 million), or 10 cents per share. The results missed the average per-share estimate by a penny.
Another disappointment for investors was medical device maker Abbott Laboratories Inc., which said Wednesday its first-quarter profit fell 19 percent, missing the average analyst forecast.
Also Wednesday, Motorola said it swung to a loss in the first quarter, hurt by disappointing cell phone sales and expenses. But excluding certain items, the results met analyst expectations.
Meanwhile, JPMorgan Chase & Co. said its first-quarter profit surged to $4.8 billion (EUR3.54 billion) on higher revenue in most of its businesses. The nation's third-largest bank did, however, report weakness in subprime mortgage lending - a struggling part of the U.S. economy that has created some volatility in the stock market this year.
Overseas, Japan's Nikkei stock average rose 0.80 percent. Britain's FTSE 100 was down 0.75 percent, Germany's DAX index was down 1.21 percent, and France's CAC-40 was down 0.75 percent.
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