US Stocks Slip on Worldwide Rally Pause01/22 09:23
Wall Street is tapping the brakes on its record-setting rally this week, as
markets worldwide take a pause on Friday.
NEW YORK (AP) -- Wall Street is tapping the brakes on its record-setting
rally this week, as markets worldwide take a pause on Friday.
The S&P 500 was 0.3% lower in early trading, a day after inching up to its
second straight all-time high. The Dow Jones Industrial Average was down 189
points, or 0.6%, at 30.986, as of 9:50 a.m. Eastern time, and the Nasdaq
composite was down 0.1%.
Losses for stocks started early in Asia and then carried westward on worries
about resurgent coronavirus cases in China and weak economic data from Europe.
In the United States, disappointing earnings reports from IBM and some other
companies gave cover for investors to sell and book profits after big recent
gains. The S&P 500 is still on pace for a 1.9% weekly gain, its third in four
IBM dropped 10.5% for one of the sharpest losses in the market after it
reported weaker revenue for the last three months of 2020 than analysts
expected. The tech giant's revenue has been mostly shrinking for years.
IBM nevertheless, though, reported a higher profit for the end of 2020 than
Wall Street expected. That's been the big theme so far in the early part of
this earnings season, with about 13% of companies in the S&P 500 having
reported. With bank and some other industries leading the way, profit reports
have consistently come in better than Wall Street had feared.
Seagate Technology fell 6.5% despite joining the cavalcade of companies to
report better earnings for the latest quarter than expected. It also gave a
forecast for revenue and profit in the current quarter that matched or topped
Wall Street's. Analysts said a lot of that optimism may have already been built
into the stock.
Markets have been mostly rallying recently on hopes that COVID-19 vaccines
will lead to a powerful economic recovery later this year as daily life gets
closer to normal. Hopes are also high that Washington will deliver another dose
of stimulus for the economy now that the White House and both houses of
Congress are under single control of the Democrats.
But the coronavirus pandemic is worsening and doing more damage to the
economy by the day. In Europe, a survey of purchasing managers showed economic
activity shrank in January in the 19-country eurozone. The data suggests the
eurozone's economy is likely to shrink again in the first three months of this
In European stock markets, France's CAC 40 fell 0.7%, and Germany's DAX lost
0.2%. The FTSE 100 in London dropped 0.5%.
In China, where the pandemic began in late 2019, the government has
reimposed travel controls after outbreaks in Beijing and other cities. A spike
in infections has authorities calling on the public to avoid travel during
February's Lunar New Year holiday, normally the year's most important family
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.
Stocks in Shanghai slipped 0.4% on Friday, while Hong Kong's Hang Seng lost
1.6%. Japan's Nikkei 225 fell 0.4%, and South Korea's Kospi dropped 0.6%.