Stocks crumble as global growth, U.S. earnings fears spook markets

Stocks crumble as global growth, U.S. earnings fears spook markets

Stocks are closing sharply lower on Wall Street, led by a swoon in technology companies.

THE QUOTE: "You've seen more discouraging (company) commentary this quarter than you have the last two", said Tom Martin, senior portfolio manager with Globalt Investments.

Nikkei futures were down 2.7 percent and pointing to opening losses of around 600 points for the cash index. The Nasdaq composite gave up 146 points, or 2 per cent, to 7,322.

Facebook saw a loss of 5.41 percent, Amazon plummeted by 5.91 percent, Google's parent company Alphabet by 5.17 percent, AT&T by 8.08 percent and Netflix by 9.4 percent.

"That's been driving a good bit of the move in the 10-year lately, expectations about how many rate increases there are going to be in 2019", Martin said. The government is expected to say Friday that the US economy grew by 3.3 percent in the third quarter, after growing by 4.2 percent in the second quarter.

Stocks opened sharply lower on Wall Street following big drops in Asia and Europe.

The expectation that the Federal Reserve will continue to raise interest rates has also spooked investors this month. In Russia, the RTS dollar index was losing 0.46 percent, while the ruble-denominated MOEX was trading flat.

BOTCHED DELIVERY: United Parcel Service slid 5.3 percent to $108.02 after the shipping company reported weak worldwide revenue, while the strong dollar and high fuel prices also hurt its results.

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"We think that the S&P 500, Treasury yields and the U.S. dollar will all fall by the end of next year, as a sharp slowdown in the USA economy prompts the Fed to stop hiking rates sooner than investors are anticipating", researchers at Capital Economics said in a note earlier this week. Valero Energy slid 4.6 percent to $87.44.

Stocks have been shaky for weeks as investors have anxious about global growth, potential impacts from trade disputes, and the Fed's determination to raise interest rates.

The falls on Wall Street came after official figures showed U.S. home sales fell to their slowest pace in almost two years, and a Federal Reserve report indicated that companies across America were concerned about the impact of tariffs and widespread labour shortages. Marathon Oil dropped 3.5 percent to $19.74.

While third-quarter profit growth estimates have risen to 22.4 percent from 21.6 percent in the last 10 days, weaker forecasts have pulled down fourth-quarter growth estimates to 19.5 percent from 20 percent, according to I/B/E/S data from Refinitiv.

The dollar weakened to 112.19 yen from 112.82 yen on Monday. Brent crude fell 76 cents to $75.68 a barrel, while USA crude dropped 40 cents to $66.42. The euro rose to $1.1486 from $1.1466. Silver dropped 0.8 percent to $14.68 an ounce.

Germany's DAX slid 2 percent and France's CAC 40 fell 1.5 percent lower. Copper was little changed at $2.76 a pound.

The CBOE Volatility Index, Wall Street's fear gauge, rose 2.1 points, its sharpest jump in two weeks.

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