NEW YORK (Reuters) – The Dow and S&P 500 ended modestly lower on Friday, driven by losses in blue-chip technology stalwarts Intel and IBM following their quarterly results, as hopes for a full economic reopening diminished in the coming months.
IBM Corp fell 9.91% and was the biggest drag on the Dow Jones Industrial Average after missing quarterly revenue estimates hurt by a rare drop in revenue in its software unit.
Intel Corp. was down 9.29% as comments following the profit of new Chief Executive Officer Pat Gelsinger pointed to the lack of a strong embrace of outsourcing.
However, losses in the technology sector were offset by gains from Microsoft Corp Apple Inc, which contained declines in major US stock indices and slightly lifted the Nasdaq.
Energy and financials performed the worst of the 11 S&P sectors on Friday, while defensive utilities and real estate groups surged.
“Any delay or setback in the theme of the reopening is likely to be a headwind for the energy industry,” said Andrew Mies, chief investment officer at 6 Meridien in Wichita, Kansas.
“(But) the market is telling you that its confidence in cyclicals has declined right now.”
The S&P 500 and Nasdaq offset some losses shortly after the opening bubble as data showed that US manufacturing activity surprisingly rose to its highest level in more than 13-1 / 2 years in early January, as opposed to a disappointing result in purchasing manager data in Europe earlier.
The Dow Jones Industrial Average fell 179.03 points, or 0.57%, to 30,996.98, the S&P 500 lost 11.6 points, or 0.30%, to 3,841.47 and the Nasdaq Composite added 12.15 points or 0.09% to 13,543.06.
The volume on the US stock exchanges was 12.79 billion shares, compared to the average of 12.68 billion for the full session over the past 20 trading days.
Despite the weakness, the three major indexes posted weekly gains, with the tech-heavy Nasdaq following for its best weekly performance since Nov. 6 as investors pinned to Alphabet Inc, Apple Inc and Amazon.com Inc in anticipation of their earnings reports in the coming weeks.
For the week, the S&P was up 1.94%, the Dow added 0.59% and the Nasdaq unofficially gained 4.19%.
As stock valuations approach levels not seen since the Dotcom era, some market participants said new COVID-19 variants and hiccups in vaccine rollout pose short-term risks.
President Joe Biden said Friday that the US economic crisis is deepening and that the government must now take drastic measures to help struggling Americans.
“The absolute certainty that investors felt a week ago … some of it is starting to disappear from the market.” Mies added, regarding the decline of the virus and the reopening of the economy.
The Senate Finance Committee unanimously approved the nomination of Janet Yellen as the first female Finance Minister, indicating that she will easily receive full Senate approval.
Diminishing problems outpaced the advance on the NYSE by a ratio of 1.00 to 1; on Nasdaq, a ratio of 1.53 to 1 was in favor of progress.
The S&P 500 posted 16 new highs in 52 weeks and no new lows; the Nasdaq Composite registered 189 new highs and 7 new lows.
Reporting by Echo Wang in New York; Additional reporting by Devik Jain and Medha Singh in Bengaluru; Edited by Saumyadeb Chakrabarty, Anil D’Silva and Diane Craft