20141020 U.S. stocks: Futures fall as IBM slides MADRID (MarketWatch) — U.S. stock futures fell into the red on Monday, as Dow industrials heavyweight IBM dropped sharply in premarket trading on downbeat results. European stocks fell after major software maker SAP cut its earnings outlook. Swinging from a thin lead to a loss, futures for the S&P 500 index SPZ4, -0.13% fell 5.6 points, or 0.3%, to 1,875140, while those for the Dow Jones Industrial Average DJZ4, -0.52% slid 81 points, or 0.5%, to 16,353. Futures for the Nasdaq-100 index NDZ4, -0.03% was wavering between losses and gains in premarket trading. Stocks rallied on Friday, but Wall Street still closed out the week with losses, with both the Dow industrials DJIA, +1.63% and the S&P 500 index SPX, +1.29% dropping 1%. The Nasdaq Composite Index COMP, +0.97% lost 0.4%. IBM disappoints: IBM IBM, -6.95% ’s earnings missed analysts’ expectations, and shares skidded more than 8% in premarket trading. IBM is the second-biggest component in the Dow industrials. Craig Erlam, market analyst at Alpari, said stock futures seemed to be containing downward pressure from European stocks until IBM hit. “A strong earnings season is going to be so important if we’re going to see an end to the panic selling that we’ve seen over the last week. IBM have got things off to a nightmare start which may hurt stocks today so now it’s down to Apple later to give investors a lift,” he said in an email. IBM also said it will sell its global semiconductor technology business to Globalfoundries, paying $1.5 billion in cash to the company over the next three years and will reflect a precash tax charge of $4.7 billion in its third-quarter results. IBM’s faltering stock also may deliver a $1-billion hit to prominent investor Warren Buffett’s Berkshire Hathaway BRK.B, +1.77% which is the largest shareholder in the tech giant, with more than 70 million shares, according to FactSet. Economic calendar: Dallas Federal Reserve President Richard Fisher will be interviewed on CNBC at 8 a.m. Eastern on Monday, and Fed Governor Jerome Powell will give a speech on community banking to a St. Louis Fed webinar at 10 a.m. Eastern Time. More earnings: Shares of Hasbro Inc. HAS, -0.66% gave up an earlier lead from results as the market turned south. rose 1% after its results. VF Corp. VFC, -0.34% is also due ahead of the bell. More than 1/3 of Dow stocks to report this week After the close, Apple Inc. AAPL, +0.81% and Chipotle Mexican Grill Inc. CMG, -0.66% will report results. Apple is projected to post fiscal fourth-quarter earnings of $1.31 a share on sales of $40 billion, according to a consensus survey by FactSet. What to watch for in Apple’s results Plus: More earnings expectations for Monday Apple also starts rolling out its Apple Pay system on Monday, though The Wall Street Journal points out the biggest gap is department-store cards. Other markets: German stocks DAX, -1.37% led fresh weakness in Europe, with the Stoxx Europe 600 index SXXP, -0.75% sinking nearly 1% after business software maker SAP SE SAP, -3.52% lowered its earnings outlook for the year. U.S.-listed shares were down 4% in premarket trade. Read more about Europe’s big stock movers here. In Asia, the Nikkei 225 index NIK, +3.98% had a spectacular rebound, surging nearly 4%, which weakened the yen USDJPY, -0.29% and drove investors into the dollar. Gold GCZ4, +0.62% was flat, while oil prices CLX4, +0.30% inched higher.
Posted on: Mon, 20 Oct 2014 12:45:48 +0000
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