United States stocks down as industrials begin to feel tariff pain

by Ben Pena October 29, 2018, 6:32
United States stocks down as industrials begin to feel tariff pain

Several companies sustained heavy drops after reporting disappointing results.

Shares fell moderately in Asia on Thursday after another torrent of selling on Wall Street sent the Dow Jones Industrial Average plummeting more than 600 points, erasing its gains for the year.

The Nasdaq fell 3.8 per cent for the week, while the Dow was down 3 per cent and the S&P 500 was down 4 per cent on the week. The tech-heavy Nasdaq slid 329.14 points, or 4.4 per cent, to 7,108.40.

The weak results from Amazon and Google parent Alphabet were the latest setback for the high-growth quartet of stocks known as FANG, which also includes Facebook Inc (FB.O) and Netflix Inc (NFLX.O).

US stocks plunged again on Wednesday, confirming a correction for the Nasdaq and erasing the Dow and the S&P 500's gains for the year, as disappointing forecasts from chipmakers and weak home sales data fueled jitters about economic and profit growth.

The S&P 500 lost 3.1 percent to 2,656.10 and has lost about 9.4 percent from its September 20 peak.

Following the heavy falls on global markets, ASX futures slumped by nearly 100 points, indicating falls of more than 2% on the local index today. Japanese telecoms and energy giant Softbank lost 4.4 percent.

Just 57 percent of S&P 500 companies have topped revenue forecasts in the third quarter, down from 72 percent in the second quarter.

ENERGY: Benchmark U.S. crude fell 0.7 per cent to $66.88 a barrel in NY.

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Meanwhile, today's data from the U.S. showed that the real GDP expanded by 3.5% in the third quarter according to the first estimate of the U.S. Bureau of Economic Analysis.

Technology stocks and media and communications companies accounted for much of the selling.

In London, the FTSE 100 retreated, closing down 0.9% at 6,939.56. The Nasdaq (.IXIC) jumped 2.95 percent, but remained down 10 percent from its August record high close.

DOES NOT COMPUTE: Texas Instruments fell 5.3 percent to $94.94 after the chipmaker delivered quarterly results that fell short of Wall Street's forecasts, noting that demand across most markets is slowing. Bond prices continued to rise, sending yields lower, as traders sought safe-haven investments.

Investors moved to the relative safety of USA government bonds, which move inversely to yields, with the 10-year falling 4.7 basis points to 3.089%, its lowest in three weeks. Amazon sank 7.8 percent to $1,642.81 while Alphabet fell 1.8 percent to $1,083.75.

United States trade wars, Federal Reserve rates policy, and the dispute between Italy and the European Union are also pressuring the markets.

All 11 major S&P sectors were in the red, with the defensive utilities, real estate and consumer staples indexes posting the smallest losses.

Oil was flat overnight, while copper prices fell and iron ore rose. Brent crude, used to price worldwide oils, slid 0.4 percent to $76.17 a barrel in London.

CURRENCIES: The dollar fell to 111.99 yen from 112.61 yen on Thursday. Hong Kong's Hang Seng sank 1.1 percent.

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