An earnings smackdown on Wall Street. Stocks are down sharply after some big disappointments from some big companies.
Yahoo Finance’s Jeff Macke says we can’t just blame the stronger dollar for the earnings woes.
“Earnings across the board are much weaker than expected when the quarter started back on September 30th. We were looking for something around 7% earnings growth, right now we’d be lucky to break even,” Macke notes.
Even though downbeat corporate results are mostly to blame for the selloff on Wall Street.. a surprise drop in durable goods orders last month didn’t help matters, either.
The Commerce Department reporting that orders for manufactured goods, such as kitchen appliances, fell 3.4% from a month earlier. And when you take out the volatile transportation sector, orders declined 0.8%.
The big drop in durable goods signalling the economy is not going gangbusters, according to Macke, and it comes as the Federal Reserve kicks off its two-day meeting.
Now for some of those not so stellar earnings.
Related: Caterpillar, P&G and Microsoft fall on disappointing results
Microsoft (MSFT) shares are sharply lower in early trading. The tech giant reported a drop in quarterly profit as weak demand for PC's put pressure on corporate sales of Windows Software and it struggled with a stronger dollar. However, earnings per share came in line with analysts' estimates and revenue slightly beat forecasts.
Caterpillar (CAT) shares also taking a hit after the company gave a disappointing outlook for the year as the recent steep decline in oil prices and lower prices for commodities, such as copper, took a toll on Caterpillar's profits in the fourth quarter. The construction and mining equipment maker reporting a big earnings per share miss while revenue beat estimates.
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Procter & Gamble (PG) shares flashing red as well. The consumer products giant coming up short on both earnings and revenue. P&G blames the strong dollar and warns foreign exchange rates will continue to be a drag on both sales and profit this year.
3M (MMM) posting profits that beat estimates, but revenue missed the mark. The company saw sales rise across all its businesses and reaffirmed its financial outlook for the year.
Pfizer (PFE) issued a disappointing outlook for the year. The company blaming the stronger dollar and patent expirations. However, quarterly earnings and revenue topped Wall Street views as sales of some of its vaccines increased. Revenue fell more than 3% from a year earlier.
Facebook (FB) is set to report earnings tomorrow after the close, but it is making headlines today. The social media company says a change in configuration systems-- NOT hackers-- caused a one-hour outage of Facebook and Instagram overnight.
Separately, Facebook is reportedly looking at personalized video advertising as it looks for new ways to grow its business.
Related: Forget the outage, Facebook has bigger issues
A big announcement on oil and gas drilling is expected today. The White House is set to announce it will open up offshore drilling in the southern Atlantic coast. The President would also ban it in some areas of Alaska.
And do you dislike the federal government? The latest American Customer Satisfaction Index finds Americans are less satisfied with Uncle Sam than at any time since it began doing such research in 2007.
