U.S. Equity Futures Fall After Falling Tech Profits
U.S. equity futures were down on Friday morning after disappointing earnings reports from tech companies.
Futures contracts on the Dow Jones Industrial Average plunged 3 points. The S&P 500 and Nasdaq-100 futures contracts also traded in negative territory.
Intel shares fell more than 8% after a few hours on a weaker than expected sales report. The semiconductor company blamed an industry-wide chip shortage for its lack of revenue.
Social media shares also plummeted in protracted exchanges after Snap said its advertising activity declined due to Apple’s privacy changes. Snap shares fell more than 21% while Facebook and Twitter each fell more than 4% after office hours.
In Thursday’s regular session, the S&P 500 hit both a new intraday high and a new closing high. The broad index rose 0.3% for its seventh consecutive positive session. The Nasdaq Composite rose 0.6%, while the Dow Jones lost 6.26 points, or 0.02%.
Investors have digested a plethora of corporate earnings reports. Tesla shares closed 3% higher on Thursday, giving support to the S&P 500 and Nadaq Composite.
Companies are showing strong earnings so far this third quarter reporting season despite headwinds in the supply chain and inflation. Of 101 members of the S&P 500 who released financial results, 82.6% exceeded earnings expectations, FactSet reported after the bell on Thursday.
“In a quarter where we thought things were going to slow down and there were concerns about the shape of profit margins, these companies are still doing well,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments .
Strong employment data also contributed to positive market sentiment. Initial jobless claims fell to a new pandemic low of 290,000 last week, the Labor Department reported Thursday – down 6,000 from the previous week and below the 300,000 expected from economists polled by Dow Jones .
The top three averages are on course to end the week up for three straight weeks of gains. Over the month, the three indices are up at least 5%.
Investors are awaiting earnings reports from companies such as American Express, Honeywell, Schlumberger and Cleveland-Cliffs on Friday.