NEW YORK, Oct 24 — US stocks fell yesterday after worries about the earnings outlook added to recent selling pressure, though major indexes ended well off the day’s lows as investors snapped up beaten-down shares late in the session.
Shares of Caterpillar tumbled 7.6 per cent after the heavy-equipment maker maintained its 2018 earnings forecast, following forecast increases in the previous two quarters.
3M Co slid 4.4 per cent after cutting its full-year profit outlook due to foreign currency-related challenges.
That reignited worries over the impact of rising borrowing costs, wages and tariffs on corporate profits and caused S&P industrial stocks to slide 1.6 per cent.
Along with worries over profit growth, concerns over the upcoming US mid-term elections and Italy’s budget have also sent investors scrambling out of stocks.
The S&P 500 energy index fell 2.7 per cent, the most of any sector, as oil prices plunged after Saudi Arabia said it could supply more crude quickly if needed.
Investors trimmed most of the losses in afternoon trading as some thought the losses were overdone. Technical buying at support levels around 2,700 on the S&P 500 also helped stocks to bounce back, strategists said.
“There was a lot of early morning fear, and when the market didn’t accelerate further to the downside, you saw some people coming in to pick up some stocks,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
The day’s earnings disappointments aside, he said, technology earnings later this week could be upbeat. Microsoft, Intel and Alphabet all are due to report this week.
The Dow Jones Industrial Average fell 125.98 points, or 0.5 per cent, to 25,191.43, the S&P 500 lost 15.19 points, or 0.55 per cent, to 2,740.69 and the Nasdaq Composite dropped 31.09 points, or 0.42 per cent, to 7,437.54.
The S&P 500 has declined for five straight sessions and is now down 6.5 per cent from its record closing high on September 20.
The Nasdaq again flirted with correction territory, falling more than 10 per cent from its August 29 record closing high before paring losses to end off those levels.
Earnings from S&P 500 companies are expected to have increased about 22 per cent in the third quarter from a year ago, though 2018 is seen as a peak for the profit cycle, according to I/B/E/S data from Refinitiv.
Among gainers, McDonald’s rose 6.3 per cent after it beat estimates for quarterly same-store sales on strong demand in international markets, while Verizon rallied 4.1 per cent after it beat estimates for profit and net new phone subscribers.
Declining issues outnumbered advancing ones on the NYSE by a 2.44-to-1 ratio; on Nasdaq, a 2.13-to-1 ratio favoured decliners.
The S&P 500 posted three new 52-week highs and 86 new lows; the Nasdaq Composite recorded nine new highs and 382 new lows.
About 9.1 billion shares changed hands on US exchanges. That compares with the 7.9 billion daily average for the past 20 trading days, according to Thomson Reuters data. — Reuters
Source: The Malay Mail Online