by James Corbett, The International Forecaster:
Markets across the board from the Dow Jones to the S&P 500 to the FTSE 100 tumbled early this week on a slew of bad data from companies across the board. These bleak earning reports combined with a drop in durable-goods orders to shave off some of the post-Draghi QE euphoria.
Blue chip firms from Pfizer to DuPont to P&G reported poor earnings or lowered future guidance on Monday, while Caterpillar’s stock dropped 7.2% on lowered energy industry demand, Microsoft plunged 8.8% on reduced software license sales, and United Technologies Corp fell 1.9% on lowered earning expectations due to the strong dollar.
These stock plunges aren’t just important in and of themselves; they’re signs that the deflationary undertow of dropping oil prices is spreading to other parts of the economy. In a market hungry for forward guidance, this is contributing to a sell-off. As Peter Jankovskis of OakBrook Investments LLC told Bloomberg yesterday: “Everybody is aware of weakness in crude oil, but you’re seeing spillover into large, industrial companies like Caterpillar and that may be giving people pause. And certainly Microsoft is a bellwether of the tech industry, and that’s another cause that’s having people pulling back.”
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