Market

Caterpillar and Nvidia warnings send Wall Street tumbling

Updated : January 29, 2019 06:29 AM IST

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.

Nine of the 11 major S&P sector indexes fell. Amazon.com Inc and Microsoft Corp each dropped nearly 2 percent, while Apple shares declined almost 1 percent, dragging down the S&P 500 and the Nasdaq.

US stocks tumbled on Monday after warnings from Caterpillar Inc and Nvidia Corp added to concerns about a slowing Chinese economy and tariffs taking a bite out of US corporate profits.

“With the Chinese economy struggling the way it is and with companies feeling the impact, the US 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.

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 began two weeks ago, analysts’ estimates for fourth-quarter profit growth have stayed steady at about 14 percent, but expectations for 2019 earnings growth have dropped to 5.6 percent from 6.3 percent.

The Dow Jones Industrial Average declined 0.84 percent to end at 24,528.22 points, while the S&P 500 lost 0.78 percent to 2,643.85. The Nasdaq Composite dropped 1.11 percent to 7,085.69.

Nine of the 11 major S&P sector indexes fell. Amazon.com Inc and Microsoft Corp each dropped nearly 2 percent, while Apple shares declined almost 1 percent, dragging down the S&P 500 and the Nasdaq. All three are set to report later this week.

The S&P energy index dropped 1.03 percent as oil prices fell after US companies added rigs for the first time this year, a signal that crude output may rise further.

Amgen Inc fell 3.43 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.

Volume on US exchanges was 7.3 billion shares, compared with the 7.7 billion-share average over the last 20 trading days.

Caterpillar and Nvidia warnings send Wall Street tumbling

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