Equity futures were weaker in pre-market trading as caution and mild profit taking came into play following the record peaks hit on Wall Street this week, though the major averages recovered much of their losses throughout the morning. The Dow is the underperformer today, as it gets weighed down by a big post-earnings slide in shares of IBM (IBM). After the pullbacks in Big Blue and Intel (INTC) on the heels of their reports, a busy slate of tech earnings is upcoming next week with high profile reports due from Apple (AAPL), Facebook (FB) and Tesla (TSLA).
ECONOMIC EVENTS: In the U.S., Markit's preliminary manufacturing PMI jumped 2 points to a new record high of 59.1 in January. Existing home sales beat estimates with a 0.7% rise to a 6.76M unit pace in December.
TOP NEWS: IBM shares were 10% lower in afternoon trading after the company reported lower than expected revenue for the fourth quarter, even though Q4 adjusted earnings beat consensus estimates. The company reported a year-over-year revenue decline in all of its categories, with Systems revenue in particular falling 17.8% from the same period last year. Looking ahead, IBM said it expects to grow revenue for fiscal 2021 based on current foreign exchange rates.
Shares of Intel are also trading 9% lower despite the company reporting better than expected earnings and revenue for Q4. The company also provided upbeat guidance for the upcoming quarter and announced a 5% increase to its quarterly cash dividend. Comments from incoming CEO Pat Gelsinger about the company's commitment to manufacture the majority of its products through 2023 appear to be disappointing some on the Street.
In other earnings news, Seagate (STX) shares fell 5% despite the company reporting better than expected second quarter results and providing upbeat third quarter guidance. Following the report, multiple analysts raised their price targets on the shares, with Craig-Hallum's Christian Schwab saying that Seagate is seeing stable pricing and has multi-quarter visibility into continued strong cloud demand and an improving enterprise environment.
In other news, Ford (F) disclosed in a regulatory filing last night that it will be conducting a field service action to replace Takata airbag inflators in certain model year 2006 through 2012 vehicles, including Ford Ranger, Fusion, Edge, Lincoln MKZ/Zephyr, MKX , and Mercury Milan vehicles in a move that will cost roughly $610M.
Meanwhile, Reuters reported that Walmart (WMT) intends to offer COVID-19 vaccinations in seven additional states, as well as in Chicago and Puerto Rico, this week and next.
MAJOR MOVERS: Among the noteworthy gainers was Sierra Wireless (SWIR), which rose 14% after announcing that Kent Thexton plans to retire from his position as president and CEO. Also lower was Ally Financial (ALLY), which gained 2% after reporting quarterly results.
Among the notable losers was Passage Bio (PASG), which declined 13% after its 7M share secondary offering priced at $22.00. Also lower was PPG (PPG), which fell 3% after reporting quarterly results.
INDEXES: In afternoon trading, the Dow was down 94.15, or 0.30%, to 31,081.86, the Nasdaq was down 2.73, or 0.02%, to 13,528.19, and the S&P 500 was down 6.01, or 0.16%, to 3,847.06.