Stocks were skidding Tuesday morning, putting the market back into the red for the year, as weak results from retailers and mounting losses for big technology companies compound the market’s losses from the day before. Energy and industrial companies are also dropping.
Target plunged after reporting earnings that missed Wall Street’s estimates, while Ross Stores, TJX and Kohl’s all gave disappointing forecasts. High-profile tech and consumer companies including Apple, Amazon and Microsoft continued to slip.
Boeing fell following reports it cancelled a conference call where the company planned to discuss systems on its latest 737 passenger jet. A Boeing 737 Max crashed shortly after takeoff in Indonesia last month, killing 189 people.
The S&P 500 index lost 45 points, or 1.7 per cent, to 2,645 as of 10:15 a.m. ET. The benchmark index is now about 10 per cent below the peak it reached in late September.
The Dow Jones Industrial Average sank 568 points, or 2.3 per cent, to 24,442. The Nasdaq composite lost 184 points, or 2.7 per cent, to 6,842. The Russell 2000 index of smaller-company stocks shed 29 points, or 2 per cent, to 1,466.
The TSX Composite Index was down 209 points, or 1.39 per cent, in midmorning trading.
Investors flee tech giants
Investors continued to flee the technology giants that have led the stock market higher in years past. Apple fell 3.4 per cent to $179.62 US and Amazon gave up 3.8 per cent to $1,455 US. Microsoft lost 3 per cent to $101.50 US. All three stocks have outperformed the market this year, but they’ve suffered steep losses more recently.
Tech stocks were among the biggest losers in Europe, too. Nokia, a big supplier of telecom networks, saw its shares drop 4 per cent, while its Swedish rival Ericsson was down 3.5 per cent. SAP, which provides business software and cloud computing services, was down over 2 per cent. Chip maker Infineon Technologies fell about 3 per cent.
Target skidded nine per cent to $70.22 US after it said its growing investments in its online business and in stores are bringing in shoppers, but are affecting its profits. Department store Kohl’s gave up 9.8 per cent to $64.01 US and TJX, the parent of TJ Maxx, fell 2.1 per cent to $47.88 US. Discount chain Ross Stores slid 4.4 per cent to $87.18 US.
Boeing fell 3.3 per cent to $310.43 US.
Investors looked for safer options. Utility companies managed small gains and bond prices edged higher. The yield on the 10-year Treasury note fell to 3.04 per cent from 3.06 per cent.
A woman walks by an electronic stock board of a securities firm in Tokyo, Tuesday. Asian stocks slid Tuesday after tech losses dragged down Wall Street and Nissan’s chairman was arrested on charges of financial misconduct. (Koji Sasahara/Associated Press)
Markets down abroad
In Europe, Germany’s DAX index lost 1.4 per cent and France’s CAC 40 shed 1.1 per cent. London’s FTSE 100 retreated 0.7 per cent.
Tokyo’s Nikkei 225 lost 1.1 per cent and Hong Kong’s Hang Seng shed 2 per cent while Seoul’s Kospi retreated 0.9 per cent.
Nissan fell more than five per cent in Asia as traders there got their first chance to react to the news that its chairman, Carlos Ghosn, who engineered a turnaround at the automaker, was arrested on charges he underreported his income and misused company funds and will be fired.
Nissan said Ghosn and another senior executive, Greg Kelly, were accused of offences discovered during an investigation set off by a whistleblower. Kelly also was arrested. The Renault-Nissan-Mitsubishi alliance sold 10.6 million cars last year, more than any other manufacturer. Renault shares dropped 8.4 per cent on Monday and another 2.5 per cent Tuesday.
Trade tensions continue
Stocks sank Monday as investors focused on simmering trade tension between Washington and Beijing after the two governments clashed at a weekend conference. The two countries have raised tariffs on billions of dollars of each other’s goods in a fight over China’s technology policy.
U.S. President Donald Trump and China’s President Xi Jinping are due to meet this month at a gathering of the Group of 20 major economies. Investors didn’t react much as the trade dispute ramped up, but more recently they’ve gotten concerned it will drag on and hinder global economic growth.
Benchmark U.S. crude lost 5.8 per cent to $53.84 US a barrel in New York. Brent crude, used to price international oils, fell 3.8 per cent to $64.28 US per barrel in London. Oil prices were little changed Monday, but they’ve plunged since early October.
With a file from CBC News.