Wall St. set to open lower ahead of big tech earnings

Wall St. set to open lower ahead of huge tech earnings

By Tanya Agrawal

(Reuters) – Wall Street was set to open slightly lower on Tuesday ahead of a raft of earnings from technology giants, including Apple, & as the dollar continues to trade at a three-month high.

The dollar index was down marginally at $97.88, its highest level since April on firming expectation of a U.S. interest rate hike after in the year.

p>A fall in commodities capped gains on Monday with gold & other precious metals trading near five-year lows.

Oil prices continued their downward spiral with U.S. crude oil falling below $50 earlier on Tuesday.

Tech giants such as Yahoo, Microsoft & Apple are scheduled to report results after the closing. Strong earnings from technology companies have been driving gains in the Nasdaq.

On Monday, the Nasdaq composite touched a new intra-day high for the third straight day while the S&P 500 was just shy of its all-time high.

"The indexes will continue to stay range bound yet at the higher end during the course of the earnings season because it has already factored in a rate hike this year," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

While markets are at record highs, June-quarter earnings of S&P 500 companies are expected to dip 2.1 percent, with revenue dropping 2.1 percent, according to Thomson Reuters data.

Of the companies that have reported earnings so far, 70 percent have reported earnings above analyst expectations, above the 63 percent average beat rate since 1994.

However, 55 percent have topped revenue forecasts, below the 61 percent average beat rate since 2002. U.S. companies were expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar that reduces the value of U.S. companies' overseas income.

S&P 500 e-minis were down 1.75 points, or 0.08 percent, with 69,306 contracts traded at 8:42 a.m. ET (1242 GMT). Nasdaq 100 e-minis were up 3.5 points, or 0.07 percent, on volume of 14,222 contracts while Dow e-minis were down 56 points, or 0.31 percent, with 11,986 contracts changing hands.

International Business Machines Corp's shares fell 5.7 percent to $163.36 in premarket trading, a day after the company's revenue fell for the 13th consecutive quarter.

Dow component United Technologies fell 4.9 percent to $105 after the company cut its full-year profit outlook as it warned of pressures in its aerospace systems & Otis elevators businesses.

Lexmark International was down 9.1 percent to $43 after the printer maker said it would cut 500 jobs, or approximately 4 percent of its global workforce.

Tesla fell 3.6 percent to $271 after UBS downgraded its rating on the stock to "sell" from "neutral". The downgrade is the third this month.

Harley-Davidson was up 5 percent to $57.70 after its quarterly profit beat expectations.

(Editing by Don Sebastian)

Source: “Reuters”

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