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TexasTowelie

(111,314 posts)
Mon Jan 28, 2019, 11:10 AM Jan 2019

Dow drops 350 points after poor outlooks from Caterpillar, Nvidia

Stocks fell sharply on Monday as investors fretted over weak earnings from Caterpillar and a big cut in revenue guidance from chipmaker Nvidia.

The Dow Jones Industrial Average fell 350 points as Caterpillar lagged. The S&P 500 dropped 1.2 percent, led lower by the tech and industrial sectors. The Nasdaq Composite declined 1.6 percent.

Caterpillar shares fell 9 percent after the industrial giant posted weaker-than-expected earnings for the fourth quarter. The company said its sales in the Asia/Pacific region declined because of lower demand in China. Caterpillar is considered a bellwether for global trade given the company’s exposure to overseas markets. The company also issued disappointing guidance.

Nvidia, meanwhile, dropped 17.5 percent after slashing its fourth-quarter revenue guidance to $2.2 billion from $2.7 billion. The chipmaker said “deteriorating macroeconomic conditions, particularly in China,” impacted demand for its graphics processing units.

Read more: https://www.cnbc.com/2019/01/28/stock-market-trump-expresses-skepticism-over-border-wall-deal.html

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Dow drops 350 points after poor outlooks from Caterpillar, Nvidia (Original Post) TexasTowelie Jan 2019 OP
It sucks having a republican casino hustler* as pResident Achilleaze Jan 2019 #1
The Price Earnings ratio is all out of wack Johnny2X2X Jan 2019 #2
That's because we still have low interest rates Yavin4 Jan 2019 #3
That's part of it Johnny2X2X Jan 2019 #4
Low interest rates inflate the money supply. Yavin4 Jan 2019 #5
Low interest rates makes stocks more appealing than bonds to investors Johnny2X2X Jan 2019 #6

Achilleaze

(15,543 posts)
1. It sucks having a republican casino hustler* as pResident
Mon Jan 28, 2019, 11:12 AM
Jan 2019

You can't trust the TopDog republican to tell the truth, and he's remarkably unsteady. No wonder Wall Street is voting NO CONFIDENCE.

* aka KGOP republican Draft-Dodger-in-Chief

&f=1

Johnny2X2X

(18,745 posts)
2. The Price Earnings ratio is all out of wack
Mon Jan 28, 2019, 11:15 AM
Jan 2019

DOW is supposed to be below 20k right now if you go by the historical PE Ratio. Too many companies are way to pricy for what their earnings are.

Yavin4

(35,357 posts)
3. That's because we still have low interest rates
Mon Jan 28, 2019, 11:19 AM
Jan 2019

For more than 10 years after the financial crisis.

Johnny2X2X

(18,745 posts)
4. That's part of it
Mon Jan 28, 2019, 11:31 AM
Jan 2019

But more than that, the valuation of too many of these companies is purely speculative. You have companies out there that cost $300 or more to buy $1 of earnings. I want to see the PE ratio move back towards the historical average.

Yavin4

(35,357 posts)
5. Low interest rates inflate the money supply.
Mon Jan 28, 2019, 11:47 AM
Jan 2019

People cannot make money on their savings. So it has to go some where.

Johnny2X2X

(18,745 posts)
6. Low interest rates makes stocks more appealing than bonds to investors
Mon Jan 28, 2019, 12:05 PM
Jan 2019

We're seeing this change now though. That is all natural though, the problem that I see is over value of under performing companies.

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