U.S. Stocks Fall for a Third Week; the S&P500 Sees the Biggest Monthly Loss Since 2010

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U.S. Stocks Fall for a Third Week; the S&P500 Sees the Biggest Monthly Loss Since 2010
U.S. Stocks Fall for a Third Week; the S&P500 Sees the Biggest Monthly Loss Since 2010

U.S. Stocks Fall for a Third Week; the S&P500 Sees the Biggest Monthly Loss Since 2010

The S&P 500’s loss for the month led to the first January decline since 2010 amidst the news that U.S. stocks fell for a third week which is the longest slump since 2012 for the Standard & Poor’s 500 Index (SPX). The reason behind the fall in the index is that the Federal Reserve cut stimulus despite the fact that the IMF and other agencies have predicted a severe impact of the measure.

The reports coming in say that the S&P 500 slipped 0.4 percent to 1,782.59 in the week and reached the lowest level since November on January, which alarmed investors to a great extent. A similar trend was seen in the Dow Jones Industrial Average which lost 180.26 points, or 1.1 percent, to 15,698.85 on the dismal trading day.

Thus, both gauges capped the worst month in almost two years. Market observers realize that with the S&P 500 finishing January down 3.6 percent while the Dow dropped 5.3 percent, means there is no headway for now for the two indexes. The biggest loser in the day’s trade was Apple (AAPL) Inc. which sank 8.3 percent after its sales projection missed expectations.

Major Losers and Gainers

A similar trend was seen in Amazon (AMZN).com Inc. which declined by 7.5 percent. The reason behind the fall in Amazon’s stocks was that its earnings report showed revenue growth slowed outside the U.S. The situation for the company aggravated further as holiday shipping costs surged. Boeing Co. (BA) was another loser which declined 8.3 percent after its profit forecast trailed predictions.

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However, Caterpillar (CAT) Inc. was an exception on the slow trading as its stocks jumped 9 percent after announcing a stock buyback and forecasting better-than-expected earnings. The company is now able to meet demand for construction equipment which has gone up recently. Caterpillar is one of the largest companies that bring up construction equipment.

The worst performance by the S&P500 may continue or discontinue, and will depend a lot on the several new developments that are going to unfold next week. A lot will be seen in the next week as Walt Disney Co. and Merck & Co. and other 92 companies in the S&P 500 are scheduled to announce financial results.

According to Bloomberg, currently, of the 251 companies that have reported, 79 percent beat analysts’ profit estimates while 66 percent exceeded on sales.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com