Tech stocks headed lower early Wednesday as Yahoo!'s ( YHOO) revenue miss overshadowed a solid quarter at IBM ( IBM). Index futures recently showed the S&P 500 trading about a point above fair value, while the Nasdaq 100 was set for a 4-point decline. The 10-year Treasury bond was unchanged in price to yield 5.14%, while the dollar rose against the yen and euro. Shares of Yahoo! lost nearly 14% after the Internet company posted a second-quarter profit of $164 million, or 11 cents a share, on sales of $1.12 billion. While net income matched Wall Street forecasts, sales were about $20 million light. For the third quarter, Yahoo! sees sales of $1.12 billion to $1.23 billion; analysts were looking for $1.20 billion. IBM, meanwhile, rose about 2% after saying second-quarter earnings rose 14% to $2.02 billion, or $1.30 a share, beating estimates by a penny. At $21.89 billion, sales were down 2% from a year ago but matched the Thomson First Call consensus. Yahoo!'s quarter set a gloomy tone ahead of a busy day for earnings and economic news. At 8:30 a.m. EDT, the Labor Department is expected to say the consumer price index rose 0.2% on both a headline and core basis in June. The report comes a day after a slightly higher-than-expected reading on the producer price index. Ninety minutes later, Federal Reserve Chairman Ben Bernanke will update Congress on his outlook for the U.S. economy in the second half of 2006. As always, traders will comb the testimony for clues about future interest rate policy, with Bernanke widely expected to stress inflation as his primary concern. Oil extended its recent slide even as Israeli and Hezbollah forces continued to exchange missile fire along the Lebanese border. August crude, which has fallen for two straight days, was recently down another 63 cents to $72.91 a barrel. Nearly 270 people are reported dead in eight days of Mideast violence, according to wire reports. To view Farnoosh Torabi's video take on today's market,
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Overseas markets were higher, with London's FTSE 100 recently adding 0.2% to 5691 and Germany's Xetra DAX up 0.3% to 5415. In Asia, Japan's Nikkei rose 0.4% overnight to 14,500, while Hong Kong's Hang Seng gained 0.3% to 16,098. On Tuesday, stocks ended an erratic session higher, helped by falling oil prices. The Dow Jones Industrial Average rose 52 points to 10,799.23, while the S&P 500 rose 2 points to 1236.86, and the Nasdaq Composite gained 5.50 points to 2043.