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 0.6%.

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 Wealth Management.

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 added.

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 expectations.

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 said.

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


(END) Dow Jones Newswires

January 22, 2021 05:07 ET (10:07 GMT)

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