Lacklustre earnings send Wall St lower
US stocks fell yesteray as lacklustre tech and materials earnings failed to live up to heightened expectations, threatening to short-circuit a seven-week run.
Declines were milder than on Wednesday, when a sharp drop pulled the market off two-year highs. Morgan Stanley posted stronger-than-expected revenue to help the banking sector rise modestly, and rose 4.6 per cent to $29.02 (£18.14).
But F5 Networks plunged 21.4 per cent to $109.15 and pulled the Nasdaq lower after the leader in the network optimisation market forecast weak second-quarter revenue.
“The tug of war continued during the course of the day with techs and financials — the two big behemoths in terms of bellwethers for the market – slugging it out all day,” said Joseph Benanti, managing director of Rosenblatt Securities in New York.
“We had a lot of movement on hot news that will subside. Cloud stocks are important, but they are not going to drive all technology. And the financials are a bigger sector to follow and are starting to hold their own.”
Google rose 2.2 per cent to $640.79 in extended trade after the company reported better-than-expected net revenue for its fourth quarter. The search engine also said co-founder Larry Page will replace Eric Schmidt in April as chief executive.
Freeport-McMoRan Copper & Gold lost 3.7 per cent to $110.90 after the copper producer trimmed its sales forecast and said costs would rise.
Resources stocks also came under pressure after data showing high growth in China stoked fears the country may tighten credit to check inflation. Alcoa shed 0.5 per cent to $15.98, while Exxon Mobil slipped 0.6 per cent to $77.75.
Fresh data showed US home sales jumped more than expected in December while jobless claims posted their biggest weekly decline in nearly a year.
The Dow Jones industrial average dipped 2.49 points, or 0.02 per cent, to 11,822.80. The Standard & Poor’s 500 Index fell 1.66 points, or 0.13 per cent, to 1,280.26. The Nasdaq Composite Index lost 21.07 points, or 0.77 per cent, to 2,704.29.