LDN - Business

Wall St. set to open lower on tepid earnings

[July 21, 2017] By Tanya Agrawal

(Reuters) - U.S. stock indexes looked set to open slightly lower on Friday, as investors took cues from earnings reports of industrial heavyweights General Electric and Honeywell.

Shares of GE <GE.N> fell 3 percent in premarket trading after the company results beat estimates but posted a nearly 60 percent decline in profit.

Honeywell International <HON.N> edged up 0.1 percent after the technology and manufacturing company reported a rise in its second-quarter profit.

Microsoft <MSFT.O> fell 0.8 percent, a day after the company reported strong fourth-quarter earnings.

Attention will turn to earnings from big tech names next week, including Amazon <AMZN.O>, Alphabet <GOOGL.O> and Facebook <FB.O>.

The Nasdaq notched its 10th straight record close on Thursday, marking its best streak since February 2015.

The tech sector has been the best performing S&P sector this year, despite concerns over stretched valuation, as investors look for growth in an otherwise low-growth environment and sectors that are relatively immune from a policy gridlock in Washington.

"If tech earnings were to disappoint, it might finally be the thing that causes a correction, even if it's a small one," said J.J. Kinahan, chief market strategist at TD Ameritrade.

Stocks ended little changed on Wall Street on Thursday as a deal between Sears <SHLD.O> and Amazon weighed on home improvement retailers, along with weak earnings.

Still, overall earnings are expected to be good with analysts expecting earnings to have climbed 8.6 percent, above the 8-percent rise projected at the start of the month, according to Thomson Reuters I/B/E/S. About 15 percent of S&P 500 companies have posted results so far.

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A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 19, 2017. REUTERS/Brendan McDermid

"The earning season has been good so far and CEOs are also painting a good picture. A lot of people are booking profits and readjusting their positions. It's been a pretty good year so far and people are taking money off the table," said Kinahan.

Dow e-minis were down 27 points, or 0.13 percent, with 15,598 contracts changing hands at 8:34 a.m. ET (1234 GMT).

S&P 500 e-minis were down 0.5 points, or 0.02 percent, with 118,646 contracts traded.

Nasdaq 100 e-minis were down 13 points, or 0.22 percent, on volume of 24,089 contracts.

Visa rose 0.8 percent after the world's largest payments network operator reported a better-than-expected quarterly profit and raised its annual earnings forecast.

EBay fell 4 percent as the company warned that adjusted profit this quarter could fall below analysts' estimates.

Schlumberger, the world's largest oilfield services provider, was up 1.5 percent after it reported better-than-expected quarterly profit and revenue.

Colgate-Palmolive fell 2.2 percent after its revenue came in below estimates.

(Reporting by Tanya Agrawal; Editing by Arun Koyyur)

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