Futures down as IBM, Intel fall after results

The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, New York, U.S

U.S. stock index futures slid from record levels on Friday as shares of blue-chip technology companies Intel and IBM tumbled following their quarterly results.

IBM Corp slumped 7.4% and was the biggest loser among Dow components trading premarket after it missed estimates for quarterly revenue, hurt by a rare sales decline in its software unit.

Intel Corp dropped about 4% as new Chief Executive Officer Pat Gelsinger signaled the lack of a strong embrace of outsourcing.

The S&P 500 and the Nasdaq ended at record levels on Thursday on optimism about further pandemic aid under the Biden administration to help the economy recover from a steep downturn.

The Senate Finance Committee will vote on Friday on Janet Yellen’s nomination for Treasury secretary, an early litmus test of bipartisan support for President Joe Biden’s ambitious plans for coronavirus relief, infrastructure investment and tax hikes.

Biden has proposed a $1.9 trillion coronavirus relief plan and has pledged to invest $2 trillion in infrastructure, green energy projects, education and research. Some Republicans have expressed concerns over its price tag.

At 06:44 a.m. ET, Dow E-minis were down 269 points, or 0.87%, and S&P 500 E-minis were down 30 points, or 0.78%. Nasdaq 100 E-minis were down 85.25 points, or 0.64%.

Breakthroughs in COVID-19 vaccines have propelled the three main U.S. stock indexes to record levels. The S&P 500 has climbed more than 14% since the Nov. 3 elections led by gains in cyclicals such as energy and banks as well as small-cap stocks.

However, with valuations approaching levels last seen in the Dotcom era, many investors are hedging against possible market turbulence that could erupt if surprise glitches hit the U.S. rollout of COVID-19 vaccines.

Investors will also keep a watch on IHS Markit’s flash readings on manufacturing and service sector PMIs for January. Both are expected to slip due to pandemic-related restrictions across the country.

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