By Geoffrey Smith
Investing.com -- U.S. stock markets opened lower on Friday on fears that the Covid-19 pandemic will do more damage over a longer period than thought, even despite the rollout of vaccines across the world.
By 9:40 AM ET (1440 GMT), the Dow Jones Industrial Average was down 217 points, or 0.7%, at 30,864 points. The S&P 500 was down 0.6% and the Nasdaq Composite was down 0.3%.
On Thursday, President Joe Biden had warned of another 100,000 deaths in this U.S. in the coming month, in an abrupt change of style from his predecessor, as regards the management of popular expectations. The emergence of new strains of the virus across the world, including some that are more easily transmitted than the original variant, has increasingly weighed on global markets this week, with regional lockdowns in parts of China and Europe all casting doubt over the narrative of a vigorous economic rebound in 2021.
On a light day for data, the U.S. bucked the trend seen in most of the world by reporting an improvement in economic activity in January, according to the purchasing managers index compiled by IHS Markit. Its U.S. manufacturing PMI rose surprisingly to 59.1 from 57.1, defying expectations of a drop. The services PMI also rose. By contrast, the Eurozone and U.K. PMIs in Europe had both fallen, under the impact of lockdowns that have been extended and tightened through the month.
Elsewhere overnight, the Japanese government was forced to deny reports that it had already resigned itself to rescheduling the summer Olympic Games this year, which had already been rescheduled once last year due to the pandemic. Outbreaks of Covid-19 in various cities in China have also stoked fears that the world's second-largest economy may not be able to stay fully open.
IBM (NYSE:IBM) stock stood out among early movers with a 10.7% decline on the back of yet another disappointing quarterly update, in which revenue fell for a fourth straight quarter. The company's CEO Arvind Krishna promised a return to growth in 2021.
Intel (NASDAQ:INTC) stock, another big index heavyweight, also weighed on the broader market, falling 6.9% after new CEO Pat Gelsinger said he wanted to outsource more chip production. The change in strategic direction overshadowed what was a better-than-expected fourth quarter for Intel, thanks to strong sales of PC and other appliances driven by the trend to remote working and learning.
The two blue chips overshadowed another hot set of data from the housing market, which showed existing home sales rose to their highest level in 14 years in December.