Before the Bell: Tech Mega-Caps: Fail; Ford: Fail; Qualcomm and Starbucks: Fail; US Steel: Win

Premarket action on Friday had the three major U.S. indexes trading lower. The Dow Jones industrials were down 0.25%, the S&P 500 down 2.75% and the Nasdaq 1.36% lower.

Seven of 11 market sectors closed higher on Thursday, with consumer cyclicals (3.08%) and technology (2.78%) posting the day’s biggest gains. Energy (−2.52%) and consumer staples (−0.86%) had the day’s worst losses. The Dow closed down 0.11%, the S&P 500 up 1.47% and the Nasdaq up 3.25%. A strong, positive reaction to Meta Platforms’ impressive results lit a fire under tech investors, just as a sharp, cold breeze from component Merck kept the Dow from participating in the fun.

Thursday’s trading volume was well above the five-day average for the second straight session. New York Stock Exchange winners led losers by 2,197 to 914, while Nasdaq advancers led decliners by about 8 to 3.

The weekly report on new claims for unemployment benefits came in with a total of 183,000 for the prior week, lower than the previous week’s total of 186,000 and well below the consensus estimate of 201,000. Continuing claims fell from 1.675 million to 1.666 million. The preliminary reading on unit labor costs rose 1.1% in the fourth quarter, lower than the third-quarter rise of 2% and below the consensus estimate of 1.5%. Productivity rose from 1.4% in the third quarter to 3%, beating the estimate of 2.5%. Spot crude closed down about 1.2% for the day.

Among S&P 500 stocks, dental alignment system maker Align Technology Inc. (NASDAQ: ALGN) added 27.38%, after beating expected quarterly earnings per share (EPS) and revenue. Specialty chemicals producer Air Products and Chemicals Inc. (NYSE: APD) dropped 22.63%, after missing consensus profit and sales estimates. An increase of 8% in the annual dividend did not mollify investors.

Thursday’s big news came after markets closed when Apple Inc. (NASDAQ: AAPL), Amazon.com Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOGL) reported December-quarter results. All three traded lower in Friday’s premarket, with Amazon down by around 4.9%, Alphabet down about 4.4% and Apple down 2.7%. All three missed EPS estimates, and only Amazon was able to beat its consensus revenue estimate.

Ford Motor Co. (NYSE: F) missed the profit estimate but beat on revenue. Ford admitted that it should have done much better in 2022 after leaving about $2 billion in profits “on the table that were in our control.” Apparently, CEO Jim Farley meant that costs were too high and sales were not as good as expected. He also said that the company would be “very aggressive” in cutting jobs. Ford traded down by an ugly 7.4% Friday morning.

Qualcomm Corp. (NASDAQ: QCOM), which also reported results Thursday afternoon, beat the EPS estimate but missed on revenue and traded down about 3.1% in Friday’s premarket.

Another widely followed stock, Starbucks Corp. (NASDAQ: SBUX), missed both profit and revenue estimates, and the stock traded down by about 2.2% Friday morning. China’s COVID-19 lockdowns cut the coffee store’s Chinese revenue by 45%. In January, the year-over-year decline had fallen by two-thirds to 15%. But the company still sees weakness in China for the current quarter.

Finally, a bit of good news on earnings. United States Steel Corp. (NYSE: X) reported solid beats on both profit and revenue. The company posted the second-best annual financial performance in its 122-year history, trailing only 2021. Shares traded up about 2.5% in Friday’s premarket.

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