Wall Street slips as IBM, Intel falter after results By Reuters

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© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange, in New York City

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By Devik Jain and Medha Singh

(Reuters) – Wall Street’s main indexes slipped on Friday, dragged down by losses in blue-chip technology stalwarts Intel and IBM (NYSE:) following their quarterly results, with concerns about a sharp rise in coronavirus cases also denting sentiment.

IBM Corp slumped about 10% and was the top drag on the after it missed estimates for quarterly revenue, hurt by a rare sales decline in its software unit.

Intel Corp (NASDAQ:) shed 9% as new Chief Executive Officer Pat Gelsinger’s post-earnings comments suggested the lack of a strong embrace of outsourcing.

However, boosts from Microsoft Corp (NASDAQ:), Apple Inc (NASDAQ:) and Facebook Inc (NASDAQ:) helped offset some of those losses, keeping the main U.S. stock indexes from falling further.

“We are going to be in a broader bull market, but there are going to be these periods where the market needs to blow off some steam … some of that euphoria needs to get washed out,” said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors in Newport Beach, California.

Shares of energy, financial, industrial and materials companies, which had boosted the by more than 14% since the elections, fell the most on Friday.

The S&P 500 and the Nasdaq pared some losses after the opening bell as data showed U.S. manufacturing activity surprisingly surged to its highest level in more than 13-1/2-years in early January.

At 12:05 p.m. ET the Dow Jones Industrial Average fell 111.96 points, or 0.36%, to 31,064.05, the S&P 500 lost 7.54 points, or 0.20%, to 3,845.53 and the lost 19.15 points, or 0.14%, to 13,511.76.

Despite the weakness, the three major indexes were set for weekly gains, with the tech-heavy Nasdaq tracking its best weekly performance since Nov. 6 as investors piled into Alphabet (NASDAQ:) Inc, Apple Inc and Amazon.com Inc (NASDAQ:) in anticipation of their earnings reports in the coming weeks.

With stock valuations nearing levels seen during the Dotcom era, some market participants said new COVID-19 variants and hiccups in vaccine rollouts pose near-term risks.

In a White House event on Thursday, President Joe Biden said the U.S. death toll from the pandemic will probably top 500,000 next month.

“That really just underlines that there are still challenges ahead and that’s giving some of the more bullish investors on the market a reason to pause before buying any more stocks,” Gokhman said.

The Senate Finance Committee unanimously approved Janet Yellen’s nomination as the first woman Treasury secretary, indicating that she will easily win full Senate approval.

Declining issues outnumbered advancers by a 1.6-to-1 ratio on the NYSE and by a 1.3-to-1 ratio on the Nasdaq.

The S&P 500 posted 10 new 52-week highs and no new low while the Nasdaq recorded 156 new highs and 16 new lows.

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