Weak outlooks hit DJIA
NEW YORK – US stocks fell yesterday, driving the Dow industrials to the biggest drop since June 21, as weak results from index members DuPont and United Technologies showed profit growth is slowing.
This earnings season has so far produced a str…
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NEW YORK – US stocks fell yesterday, driving the Dow industrials to the biggest drop since June 21, as weak results from index members DuPont and United Technologies showed profit growth is slowing.
This earnings season has so far produced a string of disappointments from companies falling short of Wall Street’s expectations.
With results in from 29 per cent of SandP 500 companies, 37 per cent have exceeded revenue forecasts, far short of the 62 per cent average, and just 57.2 per cent of the SandP 500 names reporting so far have beaten earnings forecasts, according to Thomson Reuters data.
That would be the worst percentage of companies beating earnings estimates since the fourth quarter of 2001 – should it stay at the current level, the data showed.
“We’ve had a series of misses, topped off by DuPont’s pretty dismal earnings this morning,” said Bruce Zaro, chief technical strategist at Delta Global Asset Management, in Boston.
“Expectations were low and results have been coming in generally lower, and that’s why we’re seeing weakness here,” he said.
Zaro sees the SandP 500 possibly falling as low as the 1,390 to 1,400 range in the near term.
DuPont’s stock lost 9.1 percent to 45.25 after the chemical company reported lower-than-expected quarterly profit and announced 1,500 job cuts. The stock was responsible for a 33-point drag on the Dow, which ended down more than 240 points.
The SandP materials sector index fell 3 percent, largely because of DuPont. Outlooks have been weak as well. DuPont, United Technologies and 3M Co all cut their outlooks on Tuesday.
Apple’s Chief Executive Tim Cook announced the iPad and iPhone maker was launching a smaller, cheaper tablet. Its 8-inch tablet is expected to compete in a market staked out by Amazon.com Inc and Google Inc. Apple shares dropped 3.3 percent to 613.36.
Shares of elevator and air conditioner manufacturer United Technologies were down 1 per cent at 77.07 while 3M shares were down 4.1 per cent at 88.73.
The Dow Jones industrial Average (DJIA) slid 243.36 points, or 1.82 per cent, to 13,102.53 at the close. The Standard and Poor’s 500 Index fell 20.71 points, or 1.44 per cent, to 1,413.11.
The Nasdaq Composite Index dropped 26.49 points, or 0.88 per cent, to end at 2,990.46. – Reuters
