Warnings from Caterpillar and Nvidia on Monday about weakening demand from China signal investors could see more profit shortfalls from USA companies that count on the world's No. 2 economy for a big portion of their business.
The Philadelphia semiconductor index slumped 2.09 per cent, while the S&P technology index dropped 1.40 per cent.
As we go through the week, if this becomes a theme in many different sectors, it's going to lend urgency to the idea that the global economy is slowing and the need for more stimulus, ' said Krosby.
Monday's stock market declines, following an unusual warning from Apple earlier this month, underline the flip side of such moves for USA companies.
The country last week reported its weakest annual growth since 1990.
U.S. stocks tumbled yesterday after warnings from Caterpillar Inc and Nvidia Corp added to concerns about a slowing Chinese economy and tariffs taking a bite out of United States corporate profits.
The company's shares were on track for their worst day since August 2011, accounting for almost a quarter of the Dow's fall. The company said it sales were slowing in China. "However, when we look out into our guidance for 2019 we expect total excavator sales to be about flat year-on-year" in China.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.74 percent.
LeBron James Not Expected To Play Thursday Versus Clippers
LeBron James is still recovering from the left groin injury he suffered on Christmas Day against the Golden State Warriors . The Lakers' game notes list James as "out" for Thursday's contest, although the team is not beholden to that designation.
"When you see the big cyclical companies missing earnings or missing forecasts, it worries the market because it confirms what they've already been hearing from the macro side", Dave Lafferty, chief market strategist at Natixis Investment Managers, said in an interview at Bloomberg's NY headquarters.
China, the world's second-largest economy, generated its slowest economic growth past year since 1990, and the effect is being felt widely among the many US companies that rely on China for sales, especially industrial and technology companies.
It was a rare warning from Apple Inc., and its stock fell 9 percent in a day, wiping out about $67 billion in market value.
Nvidia said weaker economic conditions, especially in China, had ground down for its consumer demand for its gaming graphics cards.
Volume on USA exchanges was 7.3 billion shares, compared with the 7.7 billion-share average over the last 20 trading days. Stripping out restructuring costs and other items, earnings were $2.55 per share, which was 43 cents short of analyst expectations.
Revenue climbed to $14.34 billion, $12.9 billion, led by increased sales in its resource industries segment. Fear of a potential recession took its toll on the stock market at the end of 2018, and the S&P 500 fell almost 20 percent between setting its record on September 20 and Christmas Eve.
Yesterday in Japan, Alps Alpine Co, a supplier of electronic parts to automakers and Apple, cut its operating profit forecast for the year by 24 percent, blaming the US-China trade dispute and Brexit. Caterpillar expects 2019 profit to increase to a range of $11.75 to $12.75 per share, compared to an expected median of $12.73 from a survey of analysts by Reuters.