Wall Street Slips Amid Mixed Earnings, China Worries
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Tighter financial conditions in China, along with mixed earnings from corporate heavyweights, sapped Wall Street's buying sentiment Wednesday.
Today's Markets
As of 3:00 p.m. ET, the Dow Jones Industrial Average fell 48.2 points, or 0.3%, to 15421, the S&P 500 dipped 7.1 points, or 0.4%, to 1748 and the Nasdaq Composite dropped 22.2 points, or 0.56%, to 3908.
The broad S&P 500 notched its thirtieth record close of the year Tuesday after investment banks pushed back their view on when the Federal Reserve will begin tapering its massive asset-buying program after a round of lukewarm data on the labor market.
The enthusiasm wore off on Wednesday as traders looked toward China. Short-term lending rates took their biggest jump since July, according to an analysis by Peter Boockvar, chief market analyst at The Lindsey Group.
The sharp move that could crimp the bounce-back in the world's No. 2 economy comes on the back of news reports suggesting the country's central bank could "impose further property measures to curb prices," according to analysts at Nomura, a Japan-based investment bank.
"We’ll soon see if Chinese officials are taking another run at slowing excessive bank lending," Boockvar said.
Mixed Earnings
Meanwhile, earnings from blue-chip companies were mixed.
Caterpillar (NYSE:CAT) revealed third-quarter profits of $1.45 a share on sales of $13.42 billion, missing expectations of $1.66 a share on revenues of $14.35 billion. The world’s biggest heavy machinery maker also said it expects to earn $5.50 a share for the full year, widely missing Wall Street’s view of $6.21 a share. Shares dropped nearly 5%.
Boeing (NYSE:BA) posted adjusted third-quarter earnings of $1.80 a share on revenues of $22.1 billion, topping estimates of $1.55 a share on sales of $21.68 billion. The aerospace giant also upped its full-year adjusted earnings forecast to $6.50 to $6.65 a share, compared with analysts’ expectations of $6.52 a share. Shares climbed 4%.
In other corporate news, JPMorgan Chase (NYSE:JPM) was nearing a $6 billion settlement with institutional investors over the sale of mortgage-backed securities leading up the financial crisis, according to a report by Reuters.
On the economic front, U.S. import prices climbed 0.2% in September from the month prior, matching expectations. Meanwhile, export prices rose 0.3% in the first climb since February, compared to estimates they would remain unchanged. The report was delayed due to the government shutdown.
U.S. crude oil prices skidded $1.44, or 1.5%, to $96.86 a barrel. Wholesale New York Harbor gasoline tumbled 2.5% to $2.552 a gallon. Gold dropped $8.60, or 0.64%, to $1334 a troy ounce.
Foreign Markets
The Euro Stoxx 50 sold off by 1% to 2016, the English FTSE 100 dipped 0.33% to 6674 and the German DAX slumped 0.4% to 8912.
In Asia, the Japanese Nikkei 225 sold off by 2% to 14426 and the Chinese Hang Seng dropped 1.4% to 23000.