NEW YORK (AP) — Wall Street turned cautious Thursday as weak profit reports from a range of companies offered the latest evidence of the economy’s toll on business.
Stock futures signaled Wall Street was set to open lower after stocks soared Wednesday on hopes the government will develop a way to remove bad debt from banks’ books.
Some pullback was to be expected after the Standard & Poor’s 500 index put up its first four-day advance since November. But investors’ mood darkened after coffee chain Starbucks Corp. and chip maker Qualcomm Inc. both reported their profits tumbled in the final three months of 2008.
And some further disappointments are likely Thursday as a flood of companies come out with their quarterly numbers. There could be some welcome surprises, but investors are uneasy ahead of results from companies including US Airways Group Inc. and Occidental Petroleum Corp.
Wall Street is also prepared for weak economic readings on sales of big-ticket durable goods and new homes. Both reports are expected to show steep declines as consumers grew more reluctant to spend since last fall as the economy stumbled.
Ahead of the earnings and economic data, Dow Jones industrial average futures fell 66, or 0.79 percent, to 8,256. Standard & Poor’s 500 index futures fell 8.30, or 0.95 percent, to 863.30, while Nasdaq 100 index futures fell 11.25, or 0.91 percent, to 1,220.00.
On Wednesday, the Dow jumped 201 points, or 2.5 percent, while broader indexes rose more than 3 percent. Investors snapped up financial stocks following media reports the Obama administration was considering creating banks to absorb the bad assets weighing down the financial system.
Bond prices were mixed early Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.69 percent from 2.67 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.16 percent from 0.17 percent Wednesday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude fell 94 cents to $41.22 a barrel in premarket electronic trading on the New York Mercantile Exchange.
Among earnings reports, Ford Motor Co. said it lost $5.9 billion in the fourth quarter but that it has no plans to seek federal aid unless economic conditions worsen. The second-largest U.S. automaker said it reached an agreement with the United Auto Workers Union to end the jobs bank in which laid-off workers get most of their pay. The union has already agreed to do so with General Motors Corp. and Chrysler LLC.
Consumer products company Colgate-Palmolive said its fourth-quarter earnings rose nearly 20 percent because of cost cuts, higher prices and new products.