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Futures edge lower as earnings roll in, chipmakers retreat


Traders work at the post where Carvana Co. is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid

U.S. stock index futures edged lower on Tuesday as corporate reports from bellwethers including 3M, Johnson & Johnson and GE pushed earnings season into high gear, while semiconductor shares pulled back from a bounce in the previous session.

In a week packed with high-profile earnings reports and key economic data, investors will now look to assess the impact of the Federal Reserve’s rate-hiking spree. The central bank is widely expected to raise rates by another quarter of a percentage point next week.

Industrial conglomerate 3M Co (MMM.N) fell 2.5%, leading the decliners among Dow components in premarket trading, after reporting a fall in quarterly profit.

General Electric Co (GE.N) slipped 2.6% as it forecast a lower-than-expected 2023 adjusted profit.

Johnson & Johnson (JNJ.N), however, rose 2.2% after the healthcare giant beat estimates for fourth-quarter profit.

Wall Street’s main indexes started the earnings-heavy week on solid ground amid renewed appetite for growth stocks following a battering last year.

After logging its biggest gain in over two months on Monday, Advanced Micro Devices Inc (AMD.O) slipped 2.5% as brokerage Bernstein downgraded the chipmaker to “market-perform” from “outperform” citing a bleak outlook for the PC market.

Other chipmakers including Nvidia Corp (NVDA.O), Intel Corp (INTC.O) and Broadcom Inc (AVGO.O) fell between 0.4% and 1%.

Analysts now see fourth-quarter earnings for S&P 500 companies dropping 3% year-on-year, nearly twice as much as the 1.6% annual drop seen at the beginning of the year, per Refinitiv data.

At 6:58 a.m. ET, Dow e-minis were down 65 points, or 0.19%, S&P 500 e-minis were down 9 points, or 0.22%, and Nasdaq 100 e-minis were down 49.5 points, or 0.41%.

Other major growth stocks also dipped, with Alphabet Inc (GOOGL.O) falling 1.1%. The U.S. Justice Department is poised to sue Google as soon as Tuesday, according to a report, regarding its dominance over the digital advertising market.

Microsoft Corp (MSFT.O) is scheduled to report quarterly earnings after the bell. Shares of the company inched 0.1% lower.

Zions Bancorporation (ZION.O) slid 2.7% after Chief Executive Harris Simmons warned that the lender continued to build loan loss reserves on recession worries.

Data from S&P Global later in the day will likely show flash manufacturing PMI fell to 46.0 in January from a final reading of 46.2 in December, while flash services PMI rose to 45 this month from 44.7 in December.

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