IBM, Intel’s decline weighs on Wall Street as coronavirus worries rise

NEW YORK (Reuters) – Wall Street indicators fell on Friday, dragged down by the losses of blue-chip technology behind Intel and IBM in their quarterly results, as hopes for a full economic reopening in the coming months diminish.

IBM Corp. fell 9.83% and was the biggest attraction of the Dow Jones industrial average after missing estimates for quarterly revenue, affected by a rare decline in sales in its software unit.

Intel Corp. fell 8.93% as new CEO Pat Gelsinger’s post-profit comments suggested a lack of a strong embrace of outsourcing.

“The challenge for the (technology) industry at this point in the earnings season is how much of their earnings growth expectations were drawn in 2020 and may not be available in 2021,” said Rob Haworth, senior investment strategist at US Bank Wealth Management in Seattle.

However, losses in the technology sector were offset by gains in Microsoft Corp., Apple Inc. and Facebook Inc., keeping the declines in major U.S. stock indices under control.

Energy, financial and industrial shares and consumer discretion, which were among the best performers since the US election in November, fell the most on Friday.

The S&P 500 and Nasdaq cut some losses after the opening bell, as data showed that U.S. production activity rose surprisingly to its highest level in more than 13-1 / 2-years in early January, unlike of a disappointing result from the data of the procurement manager earlier in Europe.

By 2:18 p.m. ET, the Dow Jones industrial average was down 121.68 points, or 0.39%, to 31,054.33, the S&P 500 was down 9.35 points, or 0.24%, to 3,843. 72, and the Nasdaq Composite fell 14.42 points, or 0.11%, to 13,516.49.

Despite the weakness, the three major indices were set for weekly gains, tracking Nasdaq technology for its best weekly performance since Nov. 6, while investors crowded into Alphabet Inc., Apple Inc. and Amazon.com Inc., pending their earnings reports. in the coming weeks.

Given that stock values ​​have approached levels unseen since the Dotcom era, some market participants have said that the new COVID-19 variants and hiccups in vaccine launches pose short-term risks.

At a White House event on Thursday, President Joe Biden said the death toll in the U.S. pandemic is likely to exceed 500,000 next month.

“If we are forced to keep the economy closed and it takes longer than we want to go through coronavirus immunizations and vaccinations, it will be a little tougher on the market than people had anticipated,” Haworth said.

The Senate Finance Committee unanimously approved the nomination of Janet Yellen as First Secretary of the Treasury, indicating that she would easily win the full approval of the Senate.

Decreasing issues outnumbered those in advance on the NYSE by a ratio of 1.54 to 1; on the Nasdaq, a 1.21 to 1 ratio favored declines.

The S&P 500 recorded 12 new 52-week highs and no new lows; Nasdaq Composite recorded 128 new highs and 6 new lows.