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| US stock market falls for second day over fears about earnings growth | |
| (8 months later) | |
| Investors drove the US stock market lower for a second straight day on Friday as they grew anxious that earnings growth was faltering. | Investors drove the US stock market lower for a second straight day on Friday as they grew anxious that earnings growth was faltering. |
| Weaker results at JPMorgan Chase dragged bank stocks lower and continued big drops in once-soaring tech stocks pushed the Nasdaq composite down for a third week. | Weaker results at JPMorgan Chase dragged bank stocks lower and continued big drops in once-soaring tech stocks pushed the Nasdaq composite down for a third week. |
| "The market has been trying to come back, but each time the selling just picks up," said Quincy Krosby, a market strategist at Prudential. "The buyers are just not stepping in." | "The market has been trying to come back, but each time the selling just picks up," said Quincy Krosby, a market strategist at Prudential. "The buyers are just not stepping in." |
| Stocks fell from the start of trading on news that JPMorgan had missed analysts' earnings estimates. Investors, who were worried that technology shares were overvalued, dumped those for a second day, with some of the biggest gainers of late falling sharply. Facebook fell 1.1%, after a 5% drop on Thursday. | Stocks fell from the start of trading on news that JPMorgan had missed analysts' earnings estimates. Investors, who were worried that technology shares were overvalued, dumped those for a second day, with some of the biggest gainers of late falling sharply. Facebook fell 1.1%, after a 5% drop on Thursday. |
| Recent stock market stars such as Netflix, Facebook, Twitter and LinkedIn are 20% to 45% below their recent peaks. The steep fall is raising questions about whether this is just a fleeting fit of fickleness or the foreshadowing of another market bubble about to burst. | Recent stock market stars such as Netflix, Facebook, Twitter and LinkedIn are 20% to 45% below their recent peaks. The steep fall is raising questions about whether this is just a fleeting fit of fickleness or the foreshadowing of another market bubble about to burst. |
| Other markets have suffered. The FTSE 100 in London suffered its worst weekly fall for a month as investors bailed out of technology companies amid fears their valuations were out of kilter with reality. | Other markets have suffered. The FTSE 100 in London suffered its worst weekly fall for a month as investors bailed out of technology companies amid fears their valuations were out of kilter with reality. |
| After a volatile few days the FTSE 100 finished at 6561.70, down 80.27 points on the day and 133 points or nearly 2% on the week. | After a volatile few days the FTSE 100 finished at 6561.70, down 80.27 points on the day and 133 points or nearly 2% on the week. |
| The Nikkei meanwhile closed down 2.4% ending the worst week for Japanese stocks since March 2011. The ASX in Sydney was down 52 points to 5428.6. | The Nikkei meanwhile closed down 2.4% ending the worst week for Japanese stocks since March 2011. The ASX in Sydney was down 52 points to 5428.6. |
| The first-quarter earnings season in the US has just started, but investors seem in little mood to wait for results. Financial analysts expect earnings for companies in the Standard & Poor's 500 index to drop 1.6% from a year earlier, according to FactSet, a financial data provider. At the start of the year, they expected a jump of 4.3%. | The first-quarter earnings season in the US has just started, but investors seem in little mood to wait for results. Financial analysts expect earnings for companies in the Standard & Poor's 500 index to drop 1.6% from a year earlier, according to FactSet, a financial data provider. At the start of the year, they expected a jump of 4.3%. |
| If profits do fall, it would be only the second quarterly drop in three years. | If profits do fall, it would be only the second quarterly drop in three years. |
| "Earnings are going to come in on the sloppy side," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The market needs to correct," he added, referring to a sharp downturn in stocks. | "Earnings are going to come in on the sloppy side," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The market needs to correct," he added, referring to a sharp downturn in stocks. |
| On Friday, the Nasdaq dropped 54.37 points, or 1.3 per cent, to 3,999.73. It was only the second time this year the index has closed below the 4,000 mark. February 3 was the last time it ended below that level. | On Friday, the Nasdaq dropped 54.37 points, or 1.3 per cent, to 3,999.73. It was only the second time this year the index has closed below the 4,000 mark. February 3 was the last time it ended below that level. |
| The Dow Jones industrial average fell 143.47 points, or 0.89 per cent, to 16,026.75. The S&P 500 fell 17.39 points, or 0.95 per cent, to 1,815.69. | The Dow Jones industrial average fell 143.47 points, or 0.89 per cent, to 16,026.75. The S&P 500 fell 17.39 points, or 0.95 per cent, to 1,815.69. |
| All 10 industry sectors in the S&P 500 dropped. Consumer discretionary stocks fell the most, down 1.4 per cent, and technology stocks were the third-biggest decliner, down 1.2 per cent. | All 10 industry sectors in the S&P 500 dropped. Consumer discretionary stocks fell the most, down 1.4 per cent, and technology stocks were the third-biggest decliner, down 1.2 per cent. |
| Last year, earnings for S&P 500 companies rose 6 per cent, a decent showing and bolstered by the Federal Reserve’s massive bond buying. | Last year, earnings for S&P 500 companies rose 6 per cent, a decent showing and bolstered by the Federal Reserve’s massive bond buying. |
| "Investors haven't worried about earnings because it hasn't mattered. Fundamentals haven't mattered," said Prudential's Krosby. "All that has mattered ... is what is the Federal Reserve was going to do." | "Investors haven't worried about earnings because it hasn't mattered. Fundamentals haven't mattered," said Prudential's Krosby. "All that has mattered ... is what is the Federal Reserve was going to do." |
| She said a drop of 10% on the indexes from their highs would be healthy for the market, giving it a sturdier base on which to rally. | She said a drop of 10% on the indexes from their highs would be healthy for the market, giving it a sturdier base on which to rally. |
| The Nasdaq is already well on its way. It is now 8 percent below its recent high in March. The S&P 500 is off 4% from its recent high on April 2. | The Nasdaq is already well on its way. It is now 8 percent below its recent high in March. The S&P 500 is off 4% from its recent high on April 2. |