Stocks Under Pressure Following Disappointing Tech Earnings - U.S. Commentary

(RTTNews) - With traders reacting negatively to earnings news from some big name tech companies, stocks have moved mostly lower in early trading on Friday. The major averages have slid into negative territory, adding to the losses posted in the previous session.

In recent trading, the major averages have seen further downside, falling to new lows for the session. The Dow is down 70.61 points or 0.4 percent at 17,911.91, the Nasdaq is down 72.38 points or 1.5 percent at 4,873.51 and the S&P 500 is down 9.85 points or 0.5 percent at 2,081.63.

The early weakness on Wall Street comes following the release of disappointing quarterly results from companies such as software giant Microsoft (MSFT).

After the close of trading on Thursday, Microsoft reported adjusted third quarter earnings of $0.62 per share compared to analyst estimates for $0.64 per share. The company also said revenues fell year-over-year and came in below analyst estimates.

Google parent Alphabet (GOOGL) is also under pressure in early trading after reporting weaker than expected first quarter results.

Outside of the tech sector, industrial firms such as General Electric (GE), Honeywell (HON), and Caterpillar (CAT) have also moved to the downside after reporting their quarterly results.

Negative sentiment may also have been generated by a report from Markit showing that its reading on U.S. manufacturing activity unexpectedly fell to a six-year low in April.

Markit said the flash estimate of its manufacturing purchasing managers index came in at 50.8 in April compared to 51.5 in March.

A reading above 50 continues to indicate growth in the manufacturing sector, but economists had expected the index to rise to 52.0.

With Microsoft leading the way lower, substantial weakness has emerged among software stocks. The Dow Jones Software Index has tumbled 4.3 percent to its lowest levels in well over a month.

Airline, internet, and biotechnology stocks have also come under pressure, while significant strength is visible among railroad, energy, and brokerage stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index jumped by 1.2 percent, while Hong Kong's Hang Seng Index fell by 0.7 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has slumped by 1.2 percent, the German DAX Index is down by 0.6 percent and the French CAC 40 Index is down by 0.4 percent.

In the bond market, treasuries are extending a recent downward trend despite the weakness on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2 basis points at 1.89 percent.