Markets

Close Update: Stocks Climb Off Lows But Suffer Heavy Losses on Missed Earnings, Durable Goods

Stocks were off their worst levels of the day at the close, but still traded with sizable losses after a flurry of disappointing fourth quarter financial results from some of Wall Street heavy hitters, coupled with an unexpected drop in durable goods orders, raised worries that the U.S. economy might be losing momentum.

Missed earnings along with some profit-warnings from Caterpillar ( CAT ), DuPont ( DD ), and Procter & Gamble ( PG ) were blamed on a stronger dollar that continues to undermine profits for U.S. multi-nationals. But investors were also spooked by the possibility that the ailing European and Asian economies might also contribute to lower corporate profits and slower U.S. economic growth. To that end, Morgan Stanley today pushed back their expectation for the Fed to raise interest rates to March 2016 as a mid-2015 rate hike looks "increasingly implausible" due to slowing production and falling inflation.

Although the unexpected 3.4% decline in December durable goods orders spooked Wall Street, the remaining data was mostly upbeat, especially consumer confidence which soared to a 7-year high as a result of cheaper fuel costs. New home sales jumped 11.8%, the PMI services index increased by more than expected, and the Case-Shiller house price index posted a better-than-expected 0.7% gain. Only the Richmond Fed manufacturing index showed a small decline from the month prior, but at 6.0 was still better than expectations.

There is no economic data to digest on Wednesday, but the FOMC will conclude its first policy meeting of 2015 at 2:00ET. Investors will be gleaning its press release for any change in language regarding "patience" in raising interest rates.

Here's where the markets stood at the close:

US MARKETS

Dow Jones Industrial Index was down 291.49 (-1.65%) to 17,387.21

S&P 500 was down 26.54 (-1.34%) to 2,029.55

Nasdaq Composite Index was down 90.27 (-1.89%) to 4,681.50

GLOBAL SENTIMENT

FTSE 100 was down 0.60%

Nikkei 225 was up 1.72%

Hang Seng Index was down 0.41%

Shanghai China Composite Index was down 0.89%

UPSIDE MOVERS

(+) SIMG Agreed to be acquired by Lattice Semiconductor ( LSCC ) for $7.30 per share

(+) WWE Network hits 1 million subscribers

(+) AMD Continued buyout talk generates additional gains

DOWNSIDE MOVERS

(-) JJSF Keybanc downgraded to Hold

(-) STAA Guides Q4 sales below expectations

(-) CAT Reported weaker-than-expected Q4 earnings, issued weak FY 2015 forecast

(-) PLT Q3 results miss estimates

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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