Lacklustre US results drag on Wall Street

US stocks slipped yesterday, a day after Wall Street’s best gains in a month, as uninspiring earnings from tech bellwethers IBM and Intel gave investors a reason to take profits.

Chesapeake Energy dropped 5.5 per cent to $18.06 and was the most actively traded stock on the New York Stock Exchange after a Reuters report that CEO Aubrey K. McClendon did not disclose loans of as much as $1.1bn over the last three years against his stake in thousands of the company’s oil and natural gas wells.

The stock fell as low as $17.17, its lowest since July 2009.

International Business Machines and Intel were among the biggest drags on the Dow. IBM missed its revenue forecast, while investors said Intel’s results failed to make a “bull case” for the stock. IBM shares slipped 3.5 per cent to $200.13 while Intel shares fell 1.8 per cent to $27.95. The PHLX semiconductor index dropped 0.9 per cent.

The lackluster reports from the two technology heavyweights came at the start of what has so far been a strong earnings season.

On Tuesday, the S&P 500 had its best day in a month as Coca-Cola Co led the day’s round of solid earnings and concerns eased over the euro zone's debt crisis.

“Both Intel and IBM have led to some profit-taking today, with both companies posting decent reports, but disappointing investors for different reasons,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut. “If you want to be an optimist, you could point to the fact that the market didn’t sell off all that much, given the solid advance we saw yesterday.”

The Dow Jones industrial average dropped 82.79 points, or 0.63 per cent, to 13,032.75 at the close. The Standard & Poor’s 500 Index shed 5.64 points, or 0.41 per cent, to 1,385.14. The Nasdaq Composite Index slipped 11.37 points, or 0.37 per cent, to 3,031.45

Among other declining shares, Berkshire Hathaway’s Class B shares dropped 1.3 per cent to $79.74 a day after CEO Warren Buffett said he has cancer.