August 28, 2014
Wall St slides on caution ahead of earnings
US stocks tumbled on caution ahead of corporate results, as mounting negative pre-announcements left a lackluster profit growth outlook.
Wall Street has seen a slow start to the year following a gangbusters 2013. After the S&P 500's jump of almost 30 percent last year, its forward price-to-earnings ratio is the highest in nearly seven years and investors are weighing the risk of paying such a high premium for earnings that may see growth stall.
The Dow Jones industrial average fell 179.11 points or 1.09 percent, to 16,257.94, the S&P 500 lost 23.17 points or 1.26 percent, to 1,819.2 and the Nasdaq Composite dropped 61.36 points or 1.47 percent, to 4,113.304.In Europe, banking shares rallied after regulators agreed to soften new leverage ratios for banks. The STOXX bank index rose 1.5 percent, extending its gains this year to almost 6 percent.
MSCI's world equity index was down 0.5 percent while emerging stocks were up 0.8 percent.
The FTSEurofirst 300 index of top European shares rose 0.3 percent to 1,324.42, while the euro zone's blue-chip Euro STOXX 50 index was up 0.3 percent at 3,111.94, both just a few points below five-year highs hit recently.
Asian shares dipped, hurt by a tumble on Wall Street, while the dollar hovered near a four-week low against the yen as last week's surprisingly weak jobs report raised concerns about the US growth outlook.
Tokyo's Nikkei benchmark was set to fall sharply, with futures down 2.7 percent, as the yen strengthened on the back of the nonfarm payroll report. Monday was a public holiday in Japan.
The Nikkei, like Wall Street, has got off to a slow start to the year after a stellar 2013, with a 57 percent jump.