IBM, Intel’s slump is weighing on Wall Street as concerns about the coronavirus mount

NEW YORK (Reuters) – Wall Street’s major indices fell Friday, slashed by losses in blue-chip technology, stalwart Intel and IBM following their quarterly results, while hopes for a full economic reopening in the coming months fades.

IBM Corp fell 9.83% and was the biggest drag on the Dow Jones Industrial Average after it missed quarterly revenue estimates hurt by a rare drop in revenue in its software unit.

Intel Corp. lost 8.93% when post-earnings comments from new Chief Executive Officer Pat Gelsinger suggested the lack of a strong embrace of outsourcing.

“The challenge for the (tech) industry at this point in the earnings season is how much of their earnings growth expectations have been 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 from Microsoft Corp, Apple Inc and Facebook Inc, which kept the declines in major US stock indices in check.

Stocks in energy, financial affairs and industrial and consumer discretion, which have been among the best-performing sectors since the US election in November, fell the most on Friday.

The S&P 500 and Nasdaq made some losses after the opening bubble as the data showed that US manufacturing activity surprisingly rose to its highest level in more than 13-1 / 2 years in early January, in contrast to a disappointing result in the data from the purchasing managers. in Europe earlier.

By 2:18 PM ET, the Dow Jones Industrial Average fell 121.68 points, or 0.39%, to 31,054.33, the S&P 500 lost 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 indexes were set for weekly gains, with tech-heavy Nasdaq tracking the best weekly performance since Nov. 6, while investors got into Alphabet Inc, Apple Inc and Amazon.com Inc. in anticipation of their earnings reports. in the coming weeks.

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.

At an event at the White House on Thursday, President Joe Biden said the US pandemic death toll is likely to exceed 500,000 next month.

“If we’re forced to keep the economy closed and it takes longer than we want through vaccinations and vaccinations for the coronavirus, it’s going to be a bit rougher in the market than people apparently expected,” Haworth said.

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.

Waning problems outpaced the advance on the NYSE by a ratio of 1.54 to 1; on Nasdaq, a 1.21-to-1 ratio was in favor of declines.

The S&P 500 posted 12 new highs in 52 weeks and no new lows; the Nasdaq Composite registered 128 new highs and 6 new lows.