Weak earnings drag down stock market
Bad earnings reports from several companies — including DuPont, 3M and United Technologies — sent the Dow plummeting on a nasty Tuesday for Wall Street. When those kind of heavy hitters struggle, it shows up in the overall numbers.
Apart from weak corporate reports, there’s uncertainty around the world, whether it’s China’s economy, the euro or the American presidential election. So there’s no shortage of news to worry investors. There are likely more choppy waters ahead, but perhaps not a violent storm.
“We still think there’s gonna be some volatility,” says Russell Investments chief market strategist Stephen Wood. “We don’t know that there necessarily needs to be a dramatic selloff.”
A somewhat hopeful manufacturing report came out of China this morning. But new numbers out of Europe today are weak. So there’s no clear indication of a broader global upturn.
Come November, though, at least one big question gets an answer. Once the identity of the White House’s occupant for the next four years is known, investors can place their bets accordingly.
There was one bright spot in Tuesday’s gloomy numbers. UPS gained three percent. It’s an important company to watch because if it’s doing well, companies are shipping, which means consumers are buying. That could be a sign of strong shopper sentiment as the year enters a critical time for retailers.
“We actually think the holiday season will be a good one,” says PNC Financial Services chief economist Stuart Hoffman. “It won’t be great, but we think sales will be three to four percent higher than last year.”
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