Stock Futures Slip, Signaling Losses After Fresh Records
By Joe Wallace
U.S. stock futures slipped Friday, signaling a muted end to a
strong week on Wall Street as investors awaited data on how the
economy performed at the start of 2021.
Futures tied to the S&P 500 fell 0.5%, indicating that the
benchmark gauge may open lower after megacap technology companies
pushed it to its fourth record close of the new year on Thursday.
Futures for the technology-focused Nasdaq-100 index lost 0.5% and
contracts tied to the Dow Jones Industrial Average declined
Markets appeared to be pausing after having rallied for much of
January, with money managers saying there was no clear catalyst for
the decline. Investors have been cheered in recent days by a solid
start to earnings season, though some are concerned that high
valuations in corners of the market will leave stocks vulnerable in
the coming months.
"With a lack of new ammunition, people are simply stopping off,"
said Lars Skovgaard Andersen, investment strategist at Danske Bank
Investors are cautious of adding new positions ahead of the
Federal Reserve's decision on monetary policy and earnings from
major companies including Facebook, Apple and Tesla next week, he
Ahead of the opening bell in New York, shares of Intel fell 4.5%
after the chip maker posted net income for 2020 of $20.9 billion,
down from $21.1 billion a year earlier. International Business
Machines fell 6.8% in premarket trading after the company said it
expected to return to revenue growth this year, after reporting a
4.6% decline in 2020.
Oil-field-services company Schlumberger and regional bank
Huntington Bancshares are among the companies due to report
earnings before the bell. Of the 62 companies on the S&P 500
that have reported results so far, 89% have beaten analysts'
expectations, according to FactSet.
"So far, so good," said Fredrik Öberg, chief investment officer
for private banking at SEB, highlighting results from Netflix,
BlackRock and several banks.
Stocks broadly retreated in overseas markets. The Stoxx Europe
600 fell 0.9%, led lower by banks, energy companies and
travel-and-leisure firms, whose profits are closely tied to the
fortunes of the economy. Italy's FTSE MIB dropped 1.4%.
Among individual European stocks, Siemens rose 4.3% after the
German engineering company said preliminary results for the first
quarter of its financial year were broadly ahead of market
In Asia, Hong Kong's Hang Seng Index ended 1.6% lower after a
local newspaper reported that the city would place tens of
thousands of people in lockdown to control Covid-19. China's
Shanghai Composite fell 0.4%.
Mr. Andersen said he was closely watching outbreaks of
coronavirus in China and Hong Kong, after many Asian economies
rebounded quickly from the pandemic last year.
"It is of course a risk that this locomotive in Asia could be
hurt by this, but we think they have it under control," he
Surveys of purchasing managers due to be published by IHS Markit
at 9:45 a.m. ET are expected to show that the U.S. manufacturing
and services sectors continued to grow this month. Data on
existing-home sales are predicted to show they fell for a
second-consecutive month in December.
The WSJ Dollar Index rose 0.1% Friday. In commodities, West
Texas Intermediate futures fell 1.5% to $52.35 a barrel.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
January 22, 2021 05:07 ET (10:07 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.