Market Ignores Positive Economic News As Earnings Reports Concern Investors

The market shrugged off positive economic indicators Tuesday amid downbeat reports from several major companies.

Among the upbeat economic news was the Markit Flash U.S. Services PMI Business Activity Index which rose from 53.3 in December to 54.0 in January. The index suggested solid output growth in the U.S. service sector.

December U.S. new home sales surged 11.6 percent according to the Commerce Department to a seasonally adjusted annual rate of 481,000 units, while the U.S. Consumer Confidence Index rose from 93.1 in December to 102.9 in January.

The Federal Reserve Bank of Richmond released the Fifth District Survey of Manufacturing Activity, which indicated an expansion of activity in January with manufacturers optimistic about business conditions.

Overall, the economic news beat expectations, however, the earnings and outlook for a number of companies concerned investors.

Microsoft Corporation MSFT fell approximately 10 percent following its earnings report amid concerns that it faces a challenging transition ahead.

Caterpillar Inc. CAT fell over 7 percent as its declining global sales worried investors.

American Airlines Group Inc AAL missed revenue expectations and fell approximately 4 percent.

Procter & Gamble Co PG was impacted by foreign exchange and missed expectations for Q2; the stock declined 3.87 percent.

The broader market indices sank amid the earnings releases. The Dow Jones Industrial Index fell 1.76 percent to 17,367.75 while the S&P 500 index declined 1.23 percent to 2,031.74.

Posted In: NewsIntraday UpdateMarketsCommerce DepartmentFederal Reserve Bank of RichmondMarkit EconomicsU.S. Consumer Confidence Index
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