On Thursday Wall Street tumbled with U.S. stocks falling over 1 percent, concerns on earnings data and the Feds comments on higher borrowing costs gripped global financial markets with the sell-off.
Also weighing on the markets lows was the pulling out of the Saudi Arabia conference by U.S. Treasury Secretary, Steven Mnuchin as they waited for additional news by investigators on the Saudi journalist, Jamal Khashoggi who went missing after entering the Saudi Embassy in Turkey.
Randy Frederick, VP of trading and derivatives at Charles Schwab in Texas said that concerns that there will be a block on arm deals with Saudi Arabia has put it in jeopardy. Until there is a resolution investors are taking profits. Stocks at Lockheed Martin, defence contractor and Raytheon fell with concerns that further arms deals will be blocked.
The Down Jones Industrial Average fell 1.09 percent or 280.57 points at 25,426.11.
The S&P 500 fell 1.12 percent or 31.60 points at 2,777.61.
The Nasdaq Composite fell 1.67 percent or 127.39 points at 7,515.32.
Comments by the Fed put stocks under pressure after the weak earnings reports from Cessna Jet maker Textron which fell 9.4 percent and United Rentals, sinking 10.8 percent. Fuelling concerns of tariffs, wages and rising borrowing costs on corporate profits.
Paul Brigandi, Managing director and head of trading at Direxion in New York said that earnings, rising rates and the minutes published by the Fed has the market on edge. Several U.S. industrial firms missed earnings and the downgrade of the housing sector by the Bank of America are also fuelling concerns of a rise in interest rates together with the trade war, all of which are hitting profits.
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Key industrial and tech names, added to investor anxiety with the S&P communications services and tech services falling 2 percent, and a drop of 1.61 percent in industrials.
Gainers on the 11 major S$P sectors were defensive utilities, consumers staples and real estate.
Exceeding analyst’s estimates on quarterly profits and sales was cigarette maker Philip Morris which gained 3.6 percent.
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