Sunday, June 16, 2024

Tech leads stocks lower in early trading on Wall Street

by Associated Press

Tech companies are leading stocks lower in the early going on Wall Street, including a steep drop in IBM after the company reported disappointing revenue in the latest quarter. The S&P 500 gave up 0.4% in the first few minutes of trading Friday, on pace to end a mostly strong week on a sour note. IBM pulled back 10%. Overseas markets were also lower. European stocks fell following a weak reading on that region’s economy, and Asian markets fell after a resurgence of coronavirus infections in China. Crude oil prices fell about 2% and Treasury yields held steady.

Global stock markets and U.S. futures retreated Friday after a resurgence of coronavirus infections in countries including China and downbeat economies news in Europe.

Futures for the Dow and S&P 500 were down 0.7%, while European indexes were down about 1% and Asian benchmarks closed lower.

Optimism about the rollout of coronavirus vaccines was dented by a spike in infections in China, where the disease had been under control. The government is testing millions of people in Beijing and some other cities. Authorities have called on the public to avoid travel during February’s Lunar New Year holiday.

That has “raised some concerns among investors who, after a slow start to the global vaccine rollout, are debating how fast economies can vaccinate the most vulnerable and start returning to business as usual,” said Stephen Innes of Axi in a report.

In Europe, sentiment was dented by a survey of purchasing managers that showed economic activity shrank in January in the 19-country eurozone. The PMI suggests the eurozone economy is likely to shrink again in the first quarter, putting it in recession. The DAX in Frankfurt retreated 0.9% to 13,775 and the CAC 40 in France shed 1.3% to 5,520. The FTSE 100 in London fell 0.8% to 6,665.

In Asia, the Shanghai Composite Index declined 0.4% to 3,606.75 and the Nikkei 225 in Tokyo sank 0.4% to 28,631.45. The Hang Seng in Hong Kong lost 1.6% to 29,447.85.

The Kospi in South Korea, where the increase in virus cases has slowed, fell 0.6% to 3,140.63. The S&P-ASX 200 in Australia shed 0.3% to 6,800.40. India’s Sensex retreated 1.1% to 49,052.61.

Stocks have risen on optimism vaccines developed by U.S., European and Chinese drug companies would allow economies to return to normal.

Markets also have been encouraged by the inauguration of President Joe Biden, who proposed a $1.9 trillion economic aid package, including $1,600 cash payments for most Americans.

Those hopes have been jolted by an upsurge in infections and the emergence of new virus variants that might be more infectious.

China, where the pandemic began in late 2019, has reimposed travel controls after outbreaks in Beijing and other cities. The government is building isolation hospitals with thousands of beds in Hebei province, which abuts the capital.

On Friday, China reported 103 new infections, the 11th day with more than 100 confirmed cases.

“The resurgence of cases in China, namely in the largest cities of Beijing and Shanghai, ahead of the Chinese New Year holidays is a cause of concern,” said Mizuho Bank in a report.

The Chinese government has called on the public to avoid gatherings and travel during the Lunar New Year holiday, normally the year’s most important family event. That is likely to dent spending on gifts, banquets and tourism, but economists say industrial activity might benefit if employees stay at their jobs.

Deaths are rising in Indonesia while case numbers increase in Malaysia, Thailand and the Philippines. Infections and deaths have been high in the U.S. and Europe as well, hitting records in some countries.

Benchmark U.S. crude lost $1.23 to $51.90 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 11 cents on Thursday. Brent crude, the price standard for international oils, shed $1.21 to $54.89 per barrel in London. It rose 2 cents the previous session.

The dollar strengthened to 103.69 yen from Thursday’s 103.52. The euro advanced to $1.2180 from $1.2160.

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