USA stocks edge lower as traders weigh earnings; oil rises

Stocks slide as 3M and Caterpillar warn of trouble

Stocks slide as 3M and Caterpillar warn of trouble

While the U.S. markets recovered some losses on Thursday, the previous trading session saw one of the worst sell-offs in recent history.

The S&P 500 index rose 16 points, or 0.6 percent, to 2,672.

Technology and consumer-focused companied led the declines early Friday.

Media and communications stocks, banks and health care companies also took heavy losses.

Bond prices rose. The yield on the 10-year Treasury note fell to 3.12 percent.

The Dow Jones Industrial Average rose 401 points, or 1.6 percent, to 24,984.

ENCOURAGING ESTIMATE: The Commerce Department said the USA economy's gross domestic product, a measure of total output of goods and services, grew at a robust annual rate of 3.5 percent in the July-September quarter.

NY trading overnight saw the Nasdaq composite with its hefty roster of tech stocks bear the brunt of the sell-off.

A clutch of weak outlooks on Wednesday pushed the Nasdaq into correction territory and erased the Dow and the S&P 500's gains for the year. "That's causing some of this volatility". Its 4.4 per cent tumble on Wednesday to 7,108.40 was its biggest drop since August 2011 but it is still up 3 per cent for the year.

Nasdaq futures (NQcv1) fell 0.8 percent and S&P futures (EScv1) lost 0.5 percent, suggesting the USA stock market may see more selling when it opens on Friday. The average was briefly down more than 500 points.

The Nasdaq experienced its worst day since August 18, 2011, falling 329 points, or 4.4 percent to 7,108, 10 percent from its August 29 all-time high. The Shanghai Composite index slipped 1.4 percent to 2,567.92 and Hong Kong's Hang Seng index skidded 2.1 percent to 24,721.31.

The S&P 500 posted 14 new 52-week highs and 91 new lows; the Nasdaq Composite recorded 15 new highs and 445 new lows.

Disappointing quarterly earnings and outlooks are stoking investors' worries that Corporate America's tax cut-fueled earnings growth will fade in coming months as interest rates rise and the trade conflict with China raises costs.

Rising rates and the trade dispute could both impair economic growth, and some encouraging economic news helped stabilize markets.

While all three rallied today following Microsoft's earnings, investors didn't like what they heard from Amazon and Alphabet, which reported earnings after the close of trading. Netflix lost 8.4 percent to $305.19. The Russell 2000 index of smaller-company stocks gave up 12.91 points, or 0.8 percent, to 1,526.59. Amazon sank 7.8 percent to $1,642.81 while Alphabet fell 1.8 percent to $1,083.75. Beazer Homes USA slumped 6.9 percent to $8.57. When the Commerce Department report on third-quarter growth comes out Friday, it's expected to show another solid pickup of 3.3 percent.

Wednesday was rough for all the USA major indexes, especially the Nasdaq.

The recent turbulence in financial markets is a contrast to what investors have grown accustomed to in a bull market that has lasted more than 10 years, the longest in history.

Commodities: Brent crude -1.2pc at $US75.51/barrel, spot gold +0.2pc $US1,232.43/ounce, iron ore +0.6pc at $US74.73/tonne. Brent crude, the benchmark for global oil prices, dropped 0.5 per cent to $76.52 a barrel in London.

The dollar fell to 111.85 yen from 112.61 yen on Thursday. The fall came after the online retailer and cloud computing heavyweight reported that its quarterly net sales rose to $56.58 billion from $43.74 billion a year earlier. Copper dipped 0.1 percent to $2.75 a pound.

A bear market is one where stock prices decline at least 20 percent from their recent peak.

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