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Overnight Markets: Wall Street falls on earnings caution
by Himanshu Singh on Jul 09, 2014 at 04:51
Wall Street declined in a broad selloff on Tuesday, with the Nasdaq Composite Index sliding the most in two months, as investors turned cautious before the start of earnings season.
The Dow Jones industrial average declined 118 points or 0.69%, to 16,907. The S&P 500 slid 14 points or 0.70%, to 1,964. The Nasdaq Composite fell 60 points or 1.35%, to 4,391.
Profits of S&P 500 companies are expected to grow 6.2% in the second quarter, according to Thomson Reuters data, down from the 8.4% growth forecast at the start of April. Revenue is seen up 3%.
In Europe, UK manufacturing unexpectedly slumped the most in 16 months in May and German exports contracted more than estimated, data showed yesterday.
In a caveat about consumers, Bill Simon, the chief executive of Wal-Mart's (WMT.N) US unit, told that while the domestic job market was improving, that wasn't giving consumers enough confidence to boost spending.
Following the close, Alcoa Inc. (AA) shares rose 1.4% after the aluminum producer reported a second-quarter profit. Small-cap stocks underperformed again, dropping for a second straight day.
Weakness in tech shares pressured the Nasdaq, with Internet names especially hit hard. Netflix Inc (NFLX.O) fell 3.4%, while Facebook Inc (FB.O) dropped 3.9%. TripAdvisor Inc (TRIP.O) sank 5.5%.
In Asia, shares declined for a second day on Wednesday as China’s factory-gate prices dropped.
The MSCI Asia Pacific Index slid 0.6% to 147 as of 11:09 a.m. in Hong Kong. Japan’s Topix index slipped 0.4%. Australia’s S&P/ASX 200 Index fell 1.1% and New Zealand’s NZX 50 Index lost 0.7%. South Korea’s Kospi index retreated 0.4%. Singapore’s Straits Times Index and Taiwan’s Taiex index both slid 0.2%.
China’s Shanghai Composite Index fell 0.3%, while Hong Kong’s Hang Seng Index dropped 1.2%.
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