Futures follow Europe, IBM lower
Stock futures are lower this morning as Europe remains under pressure and earnings disappoint.
S&P 500 futures are down about 0.2 percent, reversing initial gains late Sunday. Frankfurt, Paris, and London are all down more than 1 percent amid poor quarterly results, weak trade numbers, and persistent deflationary pressures. Asian markets rose in the overnight session, taking their cue from a big rally in the United States on Friday.
Equities are trying to rebound from a sharp selloff earlier this month, their steepest decline since beginning a historic bull rally early last year. Worries about economic growth, especially in Europe, were the main cause for the drop. Attention now shifts to quarterly results, which will dominate the agenda until the next Federal Reserve meeting on Oct. 29.
This morning's numbers have been weak. Technology giant IBM dropped 7 percent after profit and revenue lagged estimates by a wide margin. Management also cited a "marked slowdown" in September and took a $4.7 billion charge to unload its money-losing chip division. German software giant SAP also declined 4 percent after cutting revenue guidance.
Railroad CSX slipped 3 percent after merger talks with Canadian Pacific ended. Energy company QEP Resources bucked the tide with a 6 percent gain after selling its natural-gas business for $2.5 billion. Utility stock Cleco is also likely to gain after accepting a $3.4 billion takeover and Halliburton rose 4 percent after beating estimates and raising its dividend.
The next big companies to report are Apple and Texas Instruments this afternoon. Tomorrow brings United Technologies, McDonald's, and Verizon Communications before the opening bell. Yahoo follows in the afternoon.
Price action in various industry groups has been mixed recently, though the main theme has been strength in companies that benefit from low interest rates--mainly utilities and real-estate investment trusts. Gold miners have also tried to climb from long-term lows, while energy has struggled, according to our researchLAB market scanner.
Gold and silver edged fractionally higher this morning, while economic-bellwether copper declined 0.8 percent. Oil is little-changed and there are no big movers in currency markets.
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