Disappointing Intel Earnings May Lead To Pullback On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a lower open on Friday, with stocks likely to give back ground after moving sharply higher over the course of the previous session.

A negative reaction to earnings news from Intel (INTC) is likely to weigh on Wall Street, with the semiconductor giant plunging by 9.8 percent in pre-market trading.

The steep drop by Intel comes after the company reported weaker than expected fourth quarter results and forecast a loss for the current quarter.

Energy giant Chevron (CVX) may also give back ground after yesterday's surge after reporting fourth quarter earnings that missed analyst estimates.

Meanwhile, shares of American Express (AXP) are likely to see initial strength after the credit card giant reported weaker than expected fourth quarter results but provided upbeat guidance for 2023 and increased its dividend.

Overall trading activity may be somewhat subdued, however, as traders look ahead to next week's Federal Reserve meeting.

With the Fed widely expected to slow the pace of interest rate hikes to 25 basis points, traders will pay close attention to the accompanying statement for clues about the outlook for further rate hikes.

Stocks fluctuated early in the session on Thursday but moved mostly higher over the course of the trading day. With the upward move, the tech-heavy Nasdaq jumped to a four-month closing high, while the S&P 500 reached its best closing level in over a month.

The major averages saw further upside going into the close, ending the session at their best levels of the day. While the Nasdaq surged 199.06 points or 1.8 percent to 11,512.41, the S&P 500 shot up 44.21 points or 1.1 percent to 4,060.43 and the Dow climbed 205.57 points or 0.6 percent to 33,949.41.

The strength on Wall Street came following the release of some upbeat U.S. economic data, including a Commerce Department report showing U.S. economic activity surged by more than expected in the fourth quarter of 2022.

The report said real gross domestic product shot up by 2.9 percent in the fourth quarter after spiking by 3.2 percent in the third quarter. Economists had expected GDP to jump by 2.6 percent.

The stronger than expected GDP growth reflected increases in private inventory investment, consumer spending, government spending, and non-residential fixed investment.

Meanwhile, the positive contributions were partly offset by decreases in residential fixed investment and exports.

The Labor Department also released a report showing initial jobless claims unexpectedly dipped to a nine-month low in the week ended January 21st.

Separate Commerce Department reports also showed a spike in durable goods orders and a continued increase in new home sales.

The data paints a relatively positive picture of the economy but has also raised concerns about the outlook for interest rates ahead of next week's Federal Reserve meeting.

The advance by the tech-heavy Nasdaq also came amid a surge by shares of Telsa (TSLA), with the electric vehicle maker soaring by 11.0 percent after reporting better than expected fourth quarter results and provided upbeat guidance.

On the other hand, IBM Corp. (IBM) posted a steep loss, limiting the upside for the Dow, even though the tech giant reported fourth quarter results that beat expectations. The company also announced plans to cut 3,900 jobs.

Steel stocks moved sharply higher over the course of the session, driving the NYSE Arca Steel Index up by 3.2 percent to its best closing level in over eleven years.

Substantial strength was also visible among oil stocks, as reflected by the 3.1 percent surge by the NYSE Arca Oil Index. With the increase, the index reached a record closing high.

The rally by oil stocks came amid a notable increase by the price of crude oil, with crude for March delivery jumping $0.86 or 1.1 percent to $81.01 a barrel.

Energy giant Chevron posted a standout gain after announcing a $75 billion stock buyback and increasing its dividend.

Software stocks also saw significant strength on the day, resulting in a 2.9 percent spike by the Dow Jones U.S. Software Index.

Computer hardware, semiconductor and oil service stocks also showed notable moves to the upside, while gold stocks bucked the uptrend amid a decrease by the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are jumping $0.96 to $81.97 a barrel after climbing $0.86 to $81.01 a barrel on Thursday. Meanwhile, after sliding $12.60 to $1,930 an ounce in the previous session, gold futures are inching up $2.50 to $1,932.50 an ounce.

On the currency front, the U.S. dollar is trading at 129.68 yen versus the 130.22 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0872 compared to yesterday's $1.0892.

Asia

Asian markets saw further upside on Friday, as risk-on sentiment was boosted following better-than-expected GDP data from the U.S. on Thursday.

Recession worries waned as the economic growth data from the world's largest economy did not imply an imminent recession. Markets in China remain closed for a holiday.

The Japanese benchmark Nikkei 225 Index added 19.81 points or 0.1 percent to end trading at 27,382.56. The day's trading range was between 27,326.91 and 27,452.67.

Shin-Etsu Chemical Co. surged 4.1 percent and was the top gainer. Yaskawa Electric Corp. rallied more than 3 percent. Chiba Bank, Rakuten Inc. and Mizuho Financial Group both jumped more than 2 percent.

Nippon Yusen K.K., Mitsui O.S.K. Lines and Kawasaki Kisen Kaisha all soared more than 3 percent. Fuji Electric and Olympus Corp. recorded gains of more than 2 percent.

The Hang Seng Index of the Hong Kong Stock Exchange added 122.12 points or 0.5 percent from the previous close to finish trading at 22,688.90. The day's trading range was between a high of 22,700.85 and a low of 22,483.78.

The Korean Stock Exchange's Kospi Index gained 15.37 points or 0.6 percent to close trading at 2,484.02. The day's trading range was between 2,464.53 and 2,497.40.

Australia's S&P/ASX200 Index closed trading at 7,493.80 after adding 25.50 points or 0.3 percent amidst data that showed a surge in inflation. The day's trading was between 7,468.30 and 7,508.50.

Software business Megaport was the biggest gainer with a surge of more than 7 percent. Mining business Liontown Resources rallied 5.2 percent whereas Karoon Energy added 4.3 percent. Bluescope Steel and software business Wisetech Global gained more than 2 percent.

Energy business New Hope Corporation declined more than 9 percent. Whitehaven Coal dropped 6.6 percent. Regis Resources, Chalice Mining, and Pilbara Minerals all dropped more than 4 percent.

The NZX 50 Index of the New Zealand Stock Exchange added 12.59 points or 0.1 percent to close at 12,036.05. Trading ranged between 12,009.55 and 12,071.24.

Restaurant Brands NZ and Ryman Healthcare both added 3 percent. Aquaculture farming business Sanford and Oceania Healthcare, which owns and operates retirement villages and care facilities for the elderly, rallied more than 2 percent.

Healthcare business Pacific Edge declined 3.1 percent. Kiwi Property and utilities business Vector both declined more than 2 percent. Software business Serko and Meridian Energy declined more than one percent.

Europe

European stocks are modestly lower in cautious trading on Friday, with investors reacting to quarterly earnings updates and looking ahead to interest rate decisions from the Federal Reserve, the Bank of England and the European Central Bank next week.

The Fed's monetary policy announcement is due next Wednesday. The U.S. central bank is widely expected to raise rates by 25 basis points.

The BoE and the ECB are also likely to hike interest rates by 50 basis points. The central banks' views on future rate hikes and the inflation outlook will be in focus.

While the U.K.'s FTSE 100 Index is just below the unchanged line, the German DAX Index is down by 0.2 percent and the French CAC 40 Index is down by 0.3 percent.

In the U.K. market, J Sainsbury, Shell and BP are posting standout gain. Beazley, Burberry Group, Unite Group, Ashtead Group, Persimmon, Segro and GSK have also moved to the upside.

HeidelbergCement, Adidas and Zalando are also seeing significant strength in the German market.

In Paris, Kering, Societe Generale, Saint Gobain, ArcelorMittal, Vivendi and Danone are also turning in strong performances.

On the other hand, Rolls-Royce Holdings has shown a notable decline in the U.K. along with Smurfit Kappa Group, Diageo, Flutter Entertainment, and Experian.

In economic news, data released by the European Central Bank showed lending to households rising by 3.8 percent versus the growth of 4.1 percent in the previous period and. Growth in loans to companies dropped to 6.3 percent from 8.3 percent growth in the prior period.

U.S. Economic Reports

Personal income in the U.S. increased in line with economist estimates in the month of December, according to a report released by the Commerce Department on Friday.

The report said personal income inched up by 0.2 percent in December after rising by a downwardly revised 0.3 percent in November.

Economists had expected personal spending to edge up by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.

Meanwhile, the Commerce Department said personal spending dipped by 0.2 percent in December after slipping by 0.1 percent in November. The modest decrease matched economist estimates.

The report also showed the annual rate of growth in core consumer prices, which exclude food and energy prices, slowed to 4.4 percent in December from 4.7 percent in November. At 10 am ET, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of January. The consumer sentiment index is expected to be unrevised from the preliminary reading of 64.6.

The National Association of Realtors is also due to release its report on pending home sales in the month of December at 10 am ET. Pending home sales are expected to decrease by 0.9 percent in December after plunging by 4.0 percent in November.

Stocks In Focus

Shares of Silvergate Capital (SI) are moving sharply lower in pre-market trading after the cryptocurrency-focused bank suspended payments on its Series A preferred stock dividend in order to preserve capital.

Toymaker Hasbro (HAS) may also come under pressure after warning of weaker than expected fourth quarter results and announcing plans to eliminate approximately 15 percent of its global workforce.

Meanwhile, shares of Chewy (CHWY) are likely to see initial strength after Wedbush upgraded its rating on the online pet supplies retailer to Outperform from Neutral.

Financial services giant Visa (V) may also move to the upside after reporting fiscal first quarter results that exceeded analyst estimates on both the top and bottom lines.