Stock Futures Fall as Intel, IBM Retreat
NEW YORK ( TheStreet) -- Stock futures were falling Wednesday as tech majors Intel(INTC) and IBM(IBM) sank after their earnings reports and Apple(AAPL) resumed its tick lower.
Futures for the Dow Jones Industrial Average were down 3 points, or 34.5 points below fair value, at 13,021. Futures for the S&P 500 were down 0.7 points, or 3.6 points below fair value, at 1383. Futures for the Nasdaq was falling 0.5 points, or 7.2 points below fair value, at 2712.
Stocks enjoyed a broad rally on Tuesday as a strong global growth forecast from the International Monetary Fund, a pair of successful Spanish bond auctions and strong corporate results boosted investor sentiment.
In Asia, Japan's Nikkei Average finished 2.1% higher following the strength in other markets. Hong Kong's Hang Seng index rebounded 1.1%, also following gains in the other markets as well as mainland China bourses, which advanced as the property sector rallied on expectations that falling home prices would lead to stronger sales and open the door to policing easing.
In corporate earnings news, Intel cruised past Wall Street's expectations for its first-quarter results but the stock was down in premarket trading, off 2.6% to $27.72, as the Dow component forecast a sequential decline in gross margins in the second quarter.
Santa Clara, Calif.-based Intel reported non-GAAP earnings of $2.9 billion, or 56 cents a share, on revenue of $12.9 billion for the first quarter, besting the average estimate of analysts polled by Thomson Reuters for a profit of 50 cents a share in the March-ended quarter on revenue of $12.84 billion.
For the second quarter ending in June, Intel said it expects revenue of $13.6 billion, plus or minus $500 million, which compares to the current Wall Street consensus view for revenue of $13.45 billion. Gross margin for the second quarter is pegged between 62%-63% on a non-GAAP basis, a decline from a non-GAAP gross margin of 65.1% in the first quarter.
IBM shares slumped in premarket trading, down 2.1% at $203.01, after the tech giant missed Wall Street's first-quarter revenue forecast. IBM brought in revenue of $24.67 billion and earnings of $2.78 a share, compared with $24.6 billion and $2.41 in the same period last year. Analysts surveyed by Thomson Reuters expected IBM to report revenue of $24.77 billion and earnings of $2.65 a share.
Marginally offsetting IBM and Intel's slide was Yahoo!(YHOO) , which was rising 3.4% to $15.52 in premarket trading after posted better-than-expected first quarter results. Yahoo! earned 23 cents a share on revenue of $1.08 billion. Analysts were expecting profit of 17 cents a share on revenue of $1.06 billion. The Internet company also gave stronger-than-expected second-quarter revenue guidance.
On the Yahoo! conference call Tuesday, CEO Scott Thompson announced the company is cutting 50 properties, but didn't say which properties were being unloaded. Thompson was also asked about the sale of its Asian assets and noted that Yahoo! is "continuing to pursue active discussions with Alibaba."