US STOCKS-Wall St set to open lower with eyes on earnings; IBM weighs
* IBM shares slump after third-quarter revenue misses
* U.S. jobless claims fall less than expected
* Chinese rating agency cuts U.S. sovereign credit rating
* Futures down: Dow 71 pts; S&P 5.7 pts; Nasdaq 3 pts
By Angela Moon
NEW YORK, Oct 17 (Reuters) - Wall Street was set for a lower open on Thursday as investors turned their focus to the earnings of heavyweight companies such as IBM, in the wake of agreement by lawmakers in Washington to reopen the federal government and raise the debt ceiling.
International Business Machines Corp was among the biggest decliners in premarket trading, dropping 7.6 percent to $172.64. On Wednesday, the company reported a 4 percent drop in third-quarter revenue, worse than expected by Wall Street, amid a decline in hardware and emerging markets even as it beat profit estimates.
Investors booked profit after a rally on Wednesday that took major indexes up more than 1 percent following an agreement in Washington to reopen the government through Jan. 15 and raise the debt ceiling until Feb. 7.
"The anticipation for a deal was priced in yesterday, and now it's more back to the fundamentals, a rewind back to where we were before budget talks became the center focus," said Joe Saluzzi, co-head of trading at Themis Trading in Chatham, New Jersey.
"Now the focus is more on earnings from big heavyweights like IBM."
Data on Thursday showed the number of Americans filing new claims for unemployment benefits dropped from a six-month high last week, but remained elevated as California continued to deal with a backlog related to computer problems. The report barely moved the market.
S&P 500 futures fell 5.7 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 71 points and Nasdaq 100 futures lost 3 points.
Goldman Sachs shares fell 2.1 percent in premarket trading after the fifth-largest U.S. bank by assets said its quarterly profit dropped as weak bond-trading volumes hurt revenue.
Verizon Communications Inc posted stronger-than expected third-quarter earnings and revenue, sending its shares up 3 percent in premarket trading.
EBay Inc dropped 4.8 percent in premarket trading, after the company gave a disappointing holiday forecast on Wednesday, saying the U.S. economic environment had deteriorated, partly because of the government shutdown.
China's Dagong Global Credit Rating said the temporary fix of the U.S. debt issue would not defuse the fundamental conundrum of the massive U.S. fiscal deficit or improve repayment ability in the long term, but could trigger defaults at any time in the future.
"Within 20-minutes of an overnight ratings downgrade for U.S. sovereign debt, stock index futures reached session lows dragged down by a slide in the dollar," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York.