Dow plunges 608 points, erasing gains for the year

Dow plunges 608 points, erasing gains for the year

Dow plunges 608 points, erasing gains for the year

A turbulent day on Wall Street ended Tuesday with stocks climbing almost all the way out of a steep, broad sell-off that at one point erased more than 500 points from the Dow Jones Industrial Average.

Disappointing quarterly results and forward outlooks weighed on the market, stoking investors' jitters over future growth in corporate profits.

'Investors are on pins and needles, ' said Erik Davidson, chief investment officer at Wells Fargo Private Bank.

'The sentiment and the outlook seems to be turning more negative, or at the very least, less rosy'.

The strong USA economy has helped power earnings growth for companies in the S&P 500.

The Dow Jones Industrial Average dropped more than 300 points in early trading, pulled down by big drops in Caterpillar and 3M. "You're really starting to get more of a groundswell of caution".

Concerns over peak earnings was exacerbated as AT&T (NYSE:T), whose quarterly profit fell short of expectations, sending it shares tumbling more than 8%. The Dow and S&P 500 erased their gains for the year.

Hong Kong's Hang Seng index sank 3.1 percent.

Germany's DAX slid 2.2 percent and France's CAC 40 fell 1.7 percent lower. The tech-heavy Nasdaq slid 254 points, or 3.4 percent, to 7,182.


Energy stocks fell 3.50 percent, the most among the sectors, as oil prices plunged after Saudi Arabia said it could supply more crude quickly if needed, easing concerns ahead of US sanctions on Iran.

The broader S&P 500 dropped 0.6 per cent to end at 2,740.69, while the tech-rich Nasdaq Composite Index dipped 0.4 per cent to 7,437.54. The slide in bond yields came as traders sought out lower-risk assets.

That was the biggest one-day fall for the technology-focused index since August 2011.

The Dow Jones Industrial Average was higher thanks to the gain in Boeing.

Shares in iRobot plunged 12.3 percent to $80.49 after the robotics technology company said tariffs will reduce its profitability in the fourth quarter.

Chipmakers Texas Instruments and STMicroelectronics warned of slowing demand. AT&T dropped 6.2 percent.

Profit growth at S&P 500 companies is expected to have slowed to 22.1 percent in the third quarter, from the previous two, according to Refinitiv data, and is expected to slow to 19.6 percent in the fourth quarter. Of those, 57 percent delivered earnings and revenue results that topped Wall Street's forecasts.

Technology and health care companies took heavy losses Tuesday. Microsoft gave back 3.1 percent to $106.18. Homebuilders declined after the government said sales of new US homes declined in September for the fourth straight month.

U.S. stocks have been under pressure much of October amid worries over higher United States interest rates, slowing corporate earnings growth and uncertainty surrounding Saudi Arabia and other worldwide hotspots.

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