US shares hit by weak earnings
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(Close): US stocks fell sharply as trading began following a string of disappointing results from some major US companies.
The tech-focused Nasdaq fell 90 points, or 1.9%, to 4,681.
Shares in Microsoft tumbled 9.2% after the software giant reported a 10% fall in profits for the three months to the end of December.
Caterpillar shares fell 7.1% after the machinery maker reported a drop in fourth quarter profits and issued a profit forecast for 2015 that fell below expectations.
Earnings per share fell to $1.23 in the fourth quarter, down from $1.54 per share a year earlier.
For 2015, Caterpillar is predicting adjusted profit of $4.75 per share with revenues of about $50bn, both below analysts' forecasts. The company expects the recent fall in oil prices to hit demand at its energy equipment business.
Meanwhile the world's largest household products company, Procter & Gamble, predicted that its net sales would fall by up to 4% this year because of the strength of the dollar. Its shares slid 3.4%.
The company, whose brands include Pampers nappies and Tide detergent, also reported a 31% drop in net profits to $2.37bn for the final three months of 2014.
Further adding to investor concerns, US durable goods orders - a measure of large purchases like aeroplanes - fell by 3.4% in December from a month earlier, the Commerce Department reported.
Orders have fallen four of the past five months.
Demand was especially weak for civilian aircraft, machinery, and computers.
Analysts were surprised by the downturn, and cited various reasons including increased fears among businesses about turmoil relating to low oil prices, weak demand in Europe and China, and the impact of a strong dollar on their bottom lines.
A separate report showed that US house price growth slowed in November, further adding to investor fears.
The Case-Shiller index showed a nationwide decline of 0.2% in the rate of growth of house prices, pushing the annual price of gains to 4.3%.