Home Business Dow tanks 400 points on China worries – New York Post

Dow tanks 400 points on China worries – New York Post

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China’s problems are becoming corporate America’s problems.

Major stock indices dropped Monday after heavy equipment giant Caterpillar blamed “lower demand in China” as it reported disappointing fourth-quarter results and slashed its 2019 forecast.

Caterpillar shares fell 9.6 percent midday, making the stock the biggest laggard on the Dow Jones industrial average, which was down more than 400 points, or 1.6 percent, at 24,332.97.

The broader S&P 500 and tech-weighted Nasdaq fell 1.4 percent and 1.7 percent, respectively.

Earlier, China data showed earnings at industrial firms shrank for a second month in December, hit by slowing prices and weak factory activity amid a protracted US-China trade war.

As signs of a slowdown in the world’s second-largest economy become stark, investors are pinning their hopes for a compromise between Washington and Beijing on trade when officials meet later this week.

Caterpillar wasn’t the only company spooking US markets.

Chipmaker Nvidia’s shares were off 14.3 percent after it slashed its fourth-quarter revenue guidance by $500 million.

“Deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for Nvidia gaming GPUs,” the company warned in a statement, ahead of reporting earnings Feb. 14.

“Q4 was an extraordinary, unusually turbulent, and disappointing quarter,” Nvidia chief executive Jensen Huang said.

Worries of weakening China growth have caused ripples in US markets over the last few weeks.

Apple, which reports earnings after the bell on Tuesday, cut its sales forecast at the beginning of the year after noticing lower iPhone sales, particularly in China. It was the first time the tech giant slashed its forecast in 15 years.

Meanwhile, growth in China has slowed, with the world’s second-largest economy growing 6.6 percent in 2018 — its slowest clip in nearly 30 years.

With Reuters

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