U.S. shares seen opening lower as tech giants stumble

Thu Apr 17, 2014 7:47am EDT
 
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By Carolyn Cohn

LONDON (Reuters) - European shares fell and U.S. futures pointed to a weaker open on Wall Street on Thursday after disappointing results from tech heavyweights Google and IBM, while the dollar fell on dovish U.S. Federal Reserve comments.

Futures prices suggested U.S. stocks will open 0.2 percent lower. Google released earnings data after U.S. markets shut on Wednesday, showing that first-quarter revenue fell short of Wall Street targets and that margins narrowed.

IBM Corp reported after hours on Wednesday its lowest quarterly revenue for five years as it struggles with falling demand for storage and server products.

U.S. stocks had ended Wednesday with gains of 1 percent.

European stocks fell 0.25 percent ahead of the Easter holiday weekend. They were hit by a profit warning from French spirits maker Remy Cointreau and a fall in sales at UK spirits company Diageo as the Chinese government cracks down on ostentatious spending. Concern over the tense situation in Ukraine also weighed on the market.

In addition, export-driven European companies have been hurt by the strength of the euro, which makes their products more expensive in other currencies.

"I don't think first quarter earnings will be great, as you've still got a relatively high euro, which will cause a drag on year-on-year figures," said Nick Nelson, European equity strategist at UBS.

The dollar and U.S. Treasury yields fell after Fed Chair Janet Yellen on Wednesday said it might take two years to return to full employment and there was more risk of inflation staying too low than going too high.   Continued...

 
A man looks at an electronic board displaying Japan's Nikkei average (top C) and various countries' stock indices, as passers-by walk past outside a brokerage in Tokyo April 16, 2014. REUTERS/Toru Hanai