Tuesday Market Note: Disappointing Tech Results Weigh on Stocks
Disappointing tech earnings after yesterday's close, combined with sluggish results this morning pushed U.S. stock futures lower before the market open.
IBM and Texas Instruments both reported an increase in bottom line earnings, but light revenue growth. Given that corporate America has already reduced expenses throughout the recession, investors are now concerned that companies must sell more goods and services to ensure future profitability.
Days after Goldman Sachs agreed to settle with the SEC, the bank holding company reported second-quarter earnings of $2.75 per share, excluding one-time items, down from $4.93 a share this time last year. The downshift in sales was also dramatic, from $13.76 billion in Q2 2009 to $8.84 last quarter. Investment banking and trading revenue were down by over a third from last year. Shares of Goldman fell over 3 percent in the premarket.
Johnson and Johnson also weighed in on the quarter, reducing its full-year forecast due to recalls and foreign currency exchange rates. Shares are down 1.8 percent in premarket trading.
The Census Bureau said that NAHB confidence index fell for a second consecutive month to 14 in June, the lowest level since April, 2009. A reading over 50 indicates a positive outlook. The record low was 8, set in January, 2009.
Finally, 2.5 million Americans will see their unemployment benefits restored. Maine senators Olympia Snowe and Susan Collins will join 58 Democrats. Democrat Ben Nelson is opposing the legislation.
