The 2 companies sinking Wall Street

The 2 companies sinking Wall Street

The 2 companies sinking Wall Street

Caterpillar, an industry bellwether, on Monday sent a gloomy signal when it posted its biggest quarterly profit shortfall in a decade, and provided a yearly forecast that trailed some of Wall Street's estimates. Sales of $7.95 billion also beat expectations, even as 3M said foreign-currency translation reduced revenue by 2.3 percent.

Earlier, China data showed earnings at industrial firms shrank for a second month in December, hit by slowing prices and weak factory activity amid a protracted US-China trade war.

The macro assessment, along with a slight reduction to the outlook, was "not as bad as feared", Deane Dray, an analyst with RBC Capital Markets, said in a client note.

Nvidia tumbled 13.82 per cent after the chipmaker cut its fourth-quarter revenue estimate by half a billion U.S. dollars (RM2.06 billion) on weak demand for its gaming chips in China and lower-than-expected data center sales. As of writing, the Dow Jones Industrial Average was down 1.32% on the day while the S&P 500 and the Nasdaq Composite were losing 1.05% and 1.65%, respectively. The yuan appreciated to its strongest against the dollar since July before Vice Premier Liu He travels to Washington for trade talks, and as the People's Bank of China freed up a potential US$37 billion for bank lending.

The S&P energy index dropped 1.6 percent as oil prices fell more than 2 percent after USA companies added rigs for the first time this year, a signal that crude output may rise further.

Under President Donald Trump the US has imposed import taxes on steel, aluminum and hundreds of Chinese products, drawing retaliation from China and other USA trading partners. Microsoft fell 2 percent and Apple shed 0.9 percent.

Volatility has picked up as investors fret about an economic cycle that is long in the tooth, leading to sharp reactions in the market to news, said Laura Kane, head of investment themes for the Americas at UBS Wealth Management.

Equity markets have solid underpinnings with fourth-quarter earnings looking good, a likely truce in the U.S. The problem started when the President of the United States, Donald Trump vowed to fix China's "longtime abuse of the broken global system and unfair practices", during his Presidential campaign.

The S&P 500 declined 1.3%, while the Nasdaq tumbled 1.7%.

"But the complication of volatility being uncomfortable and the fact we're later cycle, that's why we're seeing these larger reactions to market news than we're used to", she said.

Economic worries seeped into the commodity markets, where USA oil prices plummeted 3.2% to $51.95 a barrel. Brent crude, used to price worldwide oils, fell 2.4 per cent to $60.13 per barrel in London.

The price of gold rose 0.4 percent, to $1,303.10 an ounce, silver also rose 0.4 percent, to $15.77 an ounce, and copper fell 1.8 percent, to $2.68 a pound. The Japanese yen gained 0.1 per cent to 109.41 per dollar.

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