How major U.S. stock indexes fared Monday

How major U.S. stock indexes fared Monday

How major U.S. stock indexes fared Monday

Stock indexes sank Monday after twin announcements highlighted how much China's slowing economic growth is hurting profits for US companies.

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.

Nvidia tumbled 13.82 per cent after the chipmaker cut its fourth-quarter revenue estimate by half a billion United States dollars (RM2.06 billion) on weak demand for its gaming chips in China and lower-than-expected data center sales.

The Philadelphia semiconductor index fell 2.1%, while the S&P technology index dropped 1.8%.

At 12:44 p.m. ET the Dow Jones Industrial Average .DJI was down 338.08 points, or 1.37%, at 24,399.12, the S&P 500 was down 31.94 points, or 1.20%, at 2,632.82 and the Nasdaq Composite was down 103.65 points, or 1.45%, at 7,061.21.

Global stock markets tumbled on Monday after Caterpillar and Nvidia Corp warned of weak Chinese demand while oil posted its biggest one-day drop in a month on expectations of growing US crude supply.

Caterpillar expects only a modest sales increase in 2019 and a smaller gain in earnings per share than analysts anticipated. Advanced Micro Devices Inc, due to report Tuesday, gets about a third of its revenue from China, based on Refinitiv's data, while Apple's results also are due Tuesday. Emerging-market stocks slipped while their currencies climbed. The market believes this to a direct outcome of the US-China trade war, which has been going on for the past few months.

China's cooling economy had already begun to reveal itself across a broad array of US economic sectors.

The trade meeting is just one of several big events that could swing markets in a busy week.

Investors are hoping for encouraging clues that interest rates will remain low enough and job growth strong enough so as to avoid a recession. With fourth-quarter S&P 500 profit growth now estimated at 14.2 percent, expectations for the quarter remain down from January 1, according to IBES data from Refinitiv.

In Europe, the threat of a continued economic slowdown has been hanging over what is an already contentious situation with Britain's expected departure from the European Union in March.

The country last week reported its weakest annual growth since 1990.

OVERSEAS: The British FTSE lost 0.1 per cent. Germany's DAX fell 0.5 per cent and France's CAC 40 fell 0.78 per cent. Japan's Nikkei 225 stock index fell 0.6 per cent. Hong Kong's Hang Seng was flat, as was South Korea's Kospi.

In the commodities market, US crude oil fell 3.2 percent, to settle at $51.99 per barrel in NY. Brent crude, the global benchmark, fell 2.2% to $60.25 a barrel.

The company expects volatile oil prices to hurt its energy and transportation business this year.

Wholesale gasoline fell 4.1 percent, to $1.33 a gallon. China accounts for about 10 percent of Caterpillar's sales.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.74 per cent. The Japanese yen gained 0.1 per cent to 109.41 per dollar. The euro rose to $1.1427 from $1.1414, and the British pound dipped to $1.3158 from $1.3198.

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