U.S stocks tumbled down on Tuesday due to the continual influx of disappointing corporate earnings reports. According to NextCandle.com's forecast, U.S indices should slide further down on Wednesday as well: the Dow was given a 61% probability of hitting a lower target, slipping down from 13102.53 to 13083.28; the S&P 500 was also given a 60% probability of hitting a lower target, edging down from 1413.11 to 1407.56, and finally Nasdaq, was given a 63% probability of hitting a lower target, dropping from 2990.46 to 2974.07.
Grim corporate earnings send stocks spiraling down
A widespread sell-off of stocks took place on Tuesday, scraping 243 points off the Dow and sending the index to a seven-week low, following a series of grim earnings reports. Twenty-eight of the Dow's 30 components posted losses; only Intel (INTC) and Microsoft (MSFT) got away with minor gains.
Tuesday's sell-off occurred after the earnings of three major U.S. industrial companies fell short of expectations. Investors now fear that the global economy may be in more critical shape than they had suspected, between uncertainty as to the economic health of Europe and China, the oncoming U.S presidential election and the menace of the fiscal cliff.
3M (MMM), considered an economic leader, reported corporate earnings in accordance with forecasts, but the company fell short of revenue estimates.
UPS (UPS), another global leader, also reported results that met analysts' expectations. After the market closed, Facebook (FB) reported third-quarter sales in accordance with analysts' expectations. The social media giant surged 8% in after-hours trading. On the other hand, Netflix (NFLX) plummeted more than 15% in after-hours trading after the company reported grim corporate results.
European stocks sharply dropped following the release of a data report indicating that eurozone services and manufacturing contracted beyond economists' forecasts. Europe is facing too many obstacles impeding economic growth to actually be able to turn over a new leaf. It will be a long ride before the continent can smooth out its debt situation.
Global stocks further recede
Disappointing earnings reports have led to a sell-off, pushing U.S indices significantly lower on Tuesday: the S&P 500 slid 1.44%, from 1433.82 to 1413.11, the Dow sank 1.82% from 13235.15 to 13102.53, and finally, Nasdaq shed 0.88%, from 3016.96 to 2990.46.
European stocks closed with sharply losses on Tuesday: Germany's DAX slumped 2.11%, France's CAC 40 fell 2.20%, and finally Britain's FTSE 100 tumbled 1.44%. Across the Pacific, Asian stocks finished Tuesday's session mixed: the Shanghai Composite shed 0.86%, while Japan's Nikkei closed practically flat again, with a 0.04% gain. Hong Kong's markets were closed on Tuesday for a local holiday.