Wall Street Drops as Economic Outlook, Corporate Forecasts Sour
STEPHEN CULP | January 22, 2019
All three major U.S. stock indexes pared losses after White House economic advisor Larry Kudlow denied a report by the Financial Times that the Trump administration canceled preparatory trade talks with China.Still, the S&P 500, the Nasdaq and the Dow all posted their biggest one-day percentage drops since Jan. 3.On Monday, the International Monetary Fund trimmed its 2019 global economic growth estimates, and China confirmed its slowest economic growth rate in 28 years. "There seems to be a plethora of negative news regarding the global economy and China and the corporate profits that were reported today couldn't offset that," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana."A lot of companies are coming out with earnings this week, so it's going to be a battle between earnings and the perception of what's going on China and the global market," Carlson added.The downbeat China news pulled chipmakers lower. The Philadelphia SE Semiconductor index <.SOX> fell 2.9 percent.Each of the FAANG momentum stocks, Facebook Inc , Apple Inc , Amazon.com , Netflix Inc and Google parent Alphabet Inc , ended down between 1.6 percent and 4.1 percent.Fears of a slowdown in corporate profits mounted as companies posting fourth-quarter results provided disappointing forward-looking projections. Johnson & Johnson dropped 1.4 percent after its 2019 sales forecast fell short of analyst expectations.Shares of Stanley Black & Decker Inc tumbled 15.5 percent after its disappointing 2019 forecast.