By Saumya Vaishampayan
U.S. stock futures fell Wednesday, weighed down by a
disappointing outlook from International Business Machines Corp.
and declines in European stocks.
Dow Jones Industrial Average futures declined 90 points, or
0.5%, to 17371. S&P 500 futures slipped eight points, or 0.4%,
to 2009 and Nasdaq-100 futures lost 15 points, or 0.4%, to 4152.
Changes in stock futures don't always accurately predict moves in
the stock market after the opening bell.
IBM reported further declines in quarterly profit and revenue,
and issued a profit forecast that fell below Wall Street's
expectations. Shares fell 2.8% premarket, leading the Dow
industrials lower.
European stocks fell, with the Stoxx Europe 600 down 0.3%.
Going into the fourth-quarter earnings season, analysts surveyed
by FactSet had expected earnings growth of 1.1%, the weakest since
the third quarter of 2012. U.S. companies faced dollar strength, a
sharp downdraft in oil prices and weak economic growth abroad
during the quarter. Early indications aren't looking too rosy;
factoring in 51 companies that have already reported, the S&P
500 is on track to post earnings growth of just 0.36% from a year
ago.
"Oil is probably the biggest story," said Bill Stone, chief
investment strategist at PNC Wealth Management. "I know that energy
earnings are going to be bad. The other side is, do any of the good
[effects] of lower oil start showing up?" Mr. Stone noted that
Delta Air Lines Inc.'s better-than-expected fourth-quarter results
were helped in part by savings on jet fuel.
Stocks ended higher Tuesday, with the Dow industrials adding
less than 0.1% to 17515.23. The S&P 500 rose 0.2% to
2022.55.
Investors are turning their attention to Thursday's European
Central Bank meeting, at which many expect the central bank to
announce large-scale purchases of government bonds. Ewald Nowotny,
a member of the ECB's governing council, said Wednesday policy
makers and central bankers should not get overexcited about
Thursday's meeting and should retain a longer-term perspective.
U.S. housing starts rose 4.4% in December to a seasonally
adjusted annual rate of 1.089 million, the Commerce Department said
Wednesday. The results far overshot the expected rise of 1% seen by
economists surveyed by The Wall Street Journal.
In commodity markets, crude-oil futures added 0.4% to $46.65 a
barrel. Gold futures tacked on 0.6% to $1302.50 an ounce.
The yield on the 10-year Treasury note fell to 1.792% from
1.806% on Tuesday. Yields fall as prices rise.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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