Left Menu
Development News Edition

US STOCKS-Caterpillar and Nvidia warnings send Wall Street tumbling


US STOCKS-Caterpillar and Nvidia warnings send Wall Street tumbling
U.S. stocks tumbled on Monday, as warnings from Caterpillar Inc and Nvidia Corp added to concerns about a slowing Chinese economy and tariffs taking a bite out of U.S. corporate profits. Shares of Caterpillar, the world's largest heavy equipment maker, fell 9 percent after its quarterly profit widely missed Wall Street estimates, hit by softening demand in China and higher manufacturing and freight costs.

The company's shares were on track for their worst day since August 2011, accounting for nearly a third of the Dow's fall. The S&P industrial index dropped 1.32 percent. Nvidia tumbled 14.8 percent after the chipmaker cut its fourth-quarter revenue estimate by half a billion dollars on weak demand for its gaming chips in China and lower-than-expected data center sales.

The Philadelphia semiconductor index slumped 2.41 percent, while the S&P technology index dropped 1.77 percent. "People had some optimism last week on earnings when numbers were pretty good, and today it's clearly gone the other way. China is such a big part of so many companies' earnings picture," said Rick Meckler, a partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

Also hurting global investor sentiment, China data showed earnings at industrial firms shrank for a second straight month in December, hit by slowing prices and weak factory activity amid a protracted trade war with the United States. As signs of a slowdown in the world's second-largest economy become stark, investors are pinning their hopes for a compromise between Washington and Beijing on trade when officials meet later this week.

"With the Chinese economy struggling the way it is and with companies feeling the impact, the U.S. is also starting to realize that there is enough motivation to get a deal done. It's just a question of when," said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada. Although earnings have largely surpassed Wall Street's expectations, helping the S&P 500 climb about 12 percent from its December lows, worries about slowing global growth have tempered expectations.

With Wall Street in the thick of quarterly results this week, 72.6 percent of companies that have already reported have exceeded profit estimates, according to IBES data from Refinitiv. Since the reporting season kicked off two weeks ago, analysts' estimates for fourth-quarter profit growth have stayed steady at about 14 percent, but expectations for 2019 earnings growth has dropped to 5.6 percent from 6.3 percent.

At 2:30 p.m. ET, the Dow Jones Industrial Average was down 1.17 percent at 24,448.34 points, while the S&P 500 had lost 1.08 percent to 2,635.87. The Nasdaq Composite dropped 1.38 percent to 7,066.33.

Nine of the 11 major S&P sector indexes were lower. Amazon.com Inc, Apple Inc and Microsoft Corp — all set to report later this week — were down more than 1 percent each, dragging down the S&P 500 and the Nasdaq. The S&P energy index dropped 1.4 percent as oil prices fell after U.S. companies added rigs for the first time this year, a signal that crude output may rise further.

Amgen Inc fell 4.1 percent, weighing the most on the Nasdaq Biotech index, after Evercore ISI downgraded its stock, citing heightened competition for its arthritis drug. Declining issues outnumbered advancing ones on the NYSE by a 1.82-to-1 ratio; on Nasdaq, a 2.11-to-1 ratio favored decliners.

The S&P 500 posted seven new 52-week highs and one new low; the Nasdaq Composite recorded 29 new highs and 29 new lows. (Reporting by Noel Randewich; Additional reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Lisa Shumaker)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION/BLOG/INTERVIEW

Conspiracy theories on COVID 19: Legislators, Scientists, and Journalists all joined the Caravan

Conspiracy theories are not new for virus epidemics. There have been conspiracy theories on HIV-AIDS, Polio Vaccines, Ebola Virus, and several other diseases as well. However, what makes the 2019 Novel Coronavirus different from others is ...

Top 10 Fake News, Myths and Realities on 2019 Novel Coronavirus COVID 19

With nearly 1500 deaths by January 14 and around 65,000 infections in China, the Novel Coronavirus 2019 has become one of the worst health epidemics of the 21st Century. However, 8,573 people have been cured but the rumor mongers are a...

Handling fake news Infodemic in time of Coronavirus epidemic

Social media has provided a platform where everybody can disseminate his her views without any supervision. Its excellent if the message is genuine but misinformation is equally disastrous. Health is such a topic where every Tom and Harry c...

Sentiment Analysis on Budget 2020: Long shot for solution to economic worries?

Industries and individuals alike had high expectations from the government to take tangible steps but the budget 2020 seems to have failed expectations....

Videos

Latest News

Asia-Pacific airlines could lose $27.8 bn to coronavirus: IATA

Paris, Feb 20 AFP Airlines operating in the Asia-Pacific region stand to lose a combined 27.8 billion of revenue this year in the ongoing coronavirus crisis, the International Air Transport Association said on Thursday. The estimate is base...

19 died in bus accident in Tamil Nadu

As many as 19 people who were traveling on a bus from Bangaluru to Ernakulam died after it collided with a truck here on Thursday. According to the police, there were 48 passengers on the bus.Meanwhile, Transport Minister AK Saseendran said...

UPDATE 1-No "smoking gun" in wartime archives of Pius XII on Holocaust, Vatican says

The Vatican will on March 2 open up its archives on the wartime pontificate of Pius XII to allow scholars to probe accusations that he turned a blind eye to the Holocaust, but they will find he helped Jews behind the scenes, Holy See offici...

US sanctions Iranian officials for barring candidates

Washington, Feb 20 AFP The United States on Thursday slapped sanctions on five Iranian officials in charge of vetting candidates for the Islamic republics parliamentary elections, in which thousands, predominantly moderates, have been barre...

Give Feedback