January 28, 2019

Dow slides nearly 400 points as Caterpillar and Nvidia reinforce slowdown fears

The biggest week of earnings season is off to a horrible start.

The Dow dropped 375 points, or 1.5%, on Monday morning after downbeat results from major companies reinforced Wall Street's slowdown fears.

The S&P 500 declined 1.3%, while the Nasdaq tumbled 1.7%.

Investors were already nervous about global growth after China reported overnight that industrial profits declined in December.

Then Caterpillar, a Dow component and reliable gauge of the world economy, shocked Wall Street by posting its biggest earnings miss in a decade. The maker of earth-moving equipment blamed its poor results on "lower demand" in China, one of its major markets.

Nvidia added to the doom-and-gloom by slashing its fourth-quarter sales guidance. The chip maker cited "deteriorating" economic conditions, "particularly in China." Nvidia shares plunged 17%. And the dreary news weighed on rivals Intel, Applied Materials and Texas Instruments, all of which fell by more than 1% apiece.

Economic worries seeped into the commodity markets, where US oil prices plummeted 3.2% to $51.95 a barrel. Brent crude, the global benchmark, fell 2.2% to $60.25 a barrel. Oil stocks such as Anadarko Petroleum and Baker Hughes fell sharply.

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