The Dow suffered a massive setback on Wednesday after two of its bellwether stocks published grisly earnings reports that raised questions about the health of the market. Dow Stumbles After 177 Point Rally The US stock market stumbled at the opening, thrusting all three major…
The Dow suffered a massive setback on Wednesday after two of its bellwether stocks published grisly earnings reports that raised questions about the health of the market.
The US stock market stumbled at the opening, thrusting all three major indices toward moderate declines. The Dow Jones Industrial Average fell 122.02 points or 0.45%, taking a bite out of yesterday’s 177 point rally. The DJIA last traded at 27,227.17.
The S&P 500 slid 7.68 points or 0.26%. Ten of 11 primary sectors reported losses, with only utilities clinging to a gain of 0.38%.
The Nasdaq fell 23.77 points or 0.29%.
Wall Street flinched after two major Dow stocks revealed ugly quarterly earnings reports.
Boeing, the most heavily weighted component in the Dow, lost a staggering $5.82 per share on revenue of $15.8 billion as the 737 MAX fiasco continues to pummel the US aerospace giant. Once the company’s most popular jet, 737 MAX deliveries have been suspended while the plane remains grounded across the world.
No one expected the scandal-ridden Boeing to post a banner quarter, but Caterpillar’s nasty results could not be dismissed so easily.
The manufacturing firm stunned investors when it missed earnings estimates by nearly 10%, recording adjusted EPS of $2.83 vs. the consensus expectation of $3.12.
Both the US-China trade war and a global economic slowdown have weighed heavy on the Dow’s 13th-largest member, and these results don’t bode well for the state of US manufacturing.
Boeing and Caterpillar each traded down. BA shares fell 0.85% to $369.90, and CAT plunged 5.24% to $130.86.
Even worse, one sector that analysts remain bullish about – technology – is suddenly under pressure as the Trump administration sets its sights on Silicon Valley.
The Department of Justice announced on Tuesday that it will probe tech giants, reportedly including FAANG staples like Facebook, Amazon, Apple, and Google.
US Treasury Secretary Steven Mnuchin praised the investigation during a CNBC interview this morning, stating that Amazon deserves to face government scrutiny since it has already “destroyed the retail industry across the United States” and “really hurt small businesses.”
Amazon stock dropped 1.23% to $1,970 after the bell.
Last modified: January 10, 2020 3:34 PM UTC