U.S. stocks were poised for a lower open Wednesday after
disappointing results from technology heavyweights Apple Inc. and
Microsoft Corp.
S&P 500 futures slipped 11 points, or 0.5%, to 2103. E-mini
Dow futures lost 69 points, or 0.4%, to 17796. E-mini Nasdaq-100
futures dropped 63 points, or 1.4%, to 4603. Changes in stock
futures don't always accurately predict moves after the opening
bell.
After the bell on Tuesday, Apple posted a 38% surge in profit
and said it sold 35% more iPhones in the fiscal third quarter
compared with a year earlier. But Apple's iPhone sales missed some
analysts' estimates and the company indicated its revenue in the
current quarter could come in below Wall Street forecasts. Shares
fell 6.9% in premarket trading.
Swings in Apple's shares can spark big moves in the major stock
indexes. As the largest company by market capitalization in the
S&P 500 and Nasdaq, Apple has an outsize impact on the two
market-cap weighted indexes. Apple is among the companies with the
highest stock prices in the Dow, which gives it major sway over the
price-weighted blue-chip index.
"Not only is it a huge company, there are a lot of companies
that depend on Apple for their businesses," said Chris Gaffney,
president of EverBank World Markets. "With future demand possibly
not as strong, we saw those shares get hurt overseas," he
added.
Declines in technology shares Wednesday helped drag European
stock markets lower. One of the biggest decliners in Europe was a
company that designs basic chip technology that is found in more
than 95% of all smartphones, including the iPhone. France's CAC-40
slipped 0.6% and Germany's DAX lost 0.9%. Asian shares were also
mostly lower.
Microsoft Corp. reported a $3.2 billion quarterly loss in its
fiscal fourth quarter on Tuesday afternoon, its biggest quarterly
loss ever. Shares fell 3.9% in premarket trading.
In other earnings news, Coca-Cola Co. on Wednesday said profit
jumped 20% in its second quarter as the beverage giant posted
volume growth. Results topped expectations, pushing shares up 1%
premarket.
Including results from 96 companies in the S&P 500, earnings
are on track to fall 3% from a year ago. Ahead of the reporting
season, analysts had forecast a 4.5% decline.
U.S. stocks fell Tuesday. The Dow lost 1% to 17919.29 and the
S&P 500 slipped 0.4% to 2119.21. The Nasdaq Composite lost 0.2%
to 5208.12, snapping a three-session winning streak.
The slump in commodities continued Wednesday. Gold futures
declined 1.5% to $1087.50 an ounce. Crude-oil futures fell 1.4% to
$50.17 a barrel.
The yield on the 10-year Treasury note slipped to 2.332% from
2.342% on Tuesday. Yields fall as prices rise.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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