por admin » Mar Abr 24, 2018 12:46 pm
Dow drops 500 points — tech shares like Alphabet and Amazon get pummeled
Fred Imbert | Alexandra Gibbs
Published 7 Hours Ago Updated 1 Min Ago
CNBC.com
3M reported quarterly earnings that met analyst expectations, but the stock dropped about 8.6 percent after the company lowered its full-year profit forecast.
Alphabet, meanwhile, topped bottom-line estimates but its stock declined more than 4 percent.
Investors initially cheered the latest corporate earnings, sending the Dow higher by 131 points at its session high.
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Stocks fell on Tuesday, giving up earlier gains, as investors were left disappointed with the latest batch of earnings while interest rates jumped to levels not seen in years.
The Dow Jones industrial average traded 490 points lower as of 1:42 p.m. ET, with 3M as the worst-performing stock in the index. The S&P 500 fell 1.4 percent, with consumer staples and technology sliding. The Nasdaq composite declined 1.7 percent as shares of Facebook, Amazon, Alphabet and Netflix all dropped more than 4 percent.
"Investors have high expectations for earnings," said Kate Warne, investment strategist at Edward Jones. "At the same time, a lot of people are asking: Does it get better from here?"
"I think that's why we're seeing such shifts in the market," Warne said.
Before the bell, 3M reported quarterly earnings that met analyst expectations, but the stock dropped about 8.6 percent after the company lowered its full-year profit forecast. Alphabet, meanwhile, topped bottom-line estimates but its stock declined more than 3 percent.
Caterpillar also erased earlier gains, trading 6.3 percent lower.
Traders work during the Pivotal Software Inc. initial public offering (IPO) on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, April 20, 2018.
Michael Nagle | Bloomberg | Getty Images
Traders work during the Pivotal Software Inc. initial public offering (IPO) on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, April 20, 2018.
Investors initially cheered the latest corporate earnings, sending the Dow higher by 131 points at its session high. United Technologies, Verizon and Coca-Cola reported better-than-expected earnings.
"I just think rates are a wet blanket. Plus look at the response to earnings. Look at Google, 3M, Caterpillar was up $6 this morning, and now its down $7. It's this violent reaction to earnings," said Peter Boockvar of Bleakley Financial Group.
"When you get this type of earnings performance it tells you a lot is priced in and people are looking at margins and guidance. When rates rise people have less tolerance for any mistakes. Even the slightest hiccup, or wrinkle is being highlighted in this type of environment," said Boockvar.
Corporate earnings this season have mostly outperformed analyst expectations thus far. Of the S&P 500 companies that have reported as of Tuesday morning, 83 percent have posted better-than-forecast earnings, according to FactSet.
Meanwhile, investors also kept an eye on the bond market, with the 10-year note yield trading at highest level since January 2014. The yield broke above 3 percent, a key psychological level, for the first time in more than four years.
Investors have been selling Treasurys this month — pushing yields higher — amid expectations of rising inflation, which could prompt the Federal Reserve to tighten monetary policy at a faster pace.