Wall Street slid on Wednesday as troubling indications from U.S. corporations and the falling demand for long-lasting manufactured goods had discourages investors already nervous of debt talks in Washington.
Weighing in upon technology shares, Juniper Networks Inc. (JNPR) plunged by 20.1 percent after the company cautioned late Tuesday that its second-quarter results would miss expectations. The Nasdaq declined 2 percent shortly after the market opened.
Moderating order growth at Emerson Electric Co. (EMR) added more concern about industrial companies after revealing weak earnings in the sector. Emerson’s shares declined by 7 percent.
The S&P 500 (^SPX) declined by more than 2 percent this week as the debate about raising the debt ceiling in the U.S. has left investors worried over a U.S. debt default or a possible credit downgrade later on this year.
“We haven’t been committing new capital. We’ve been holding off on making any purchases over the last few days,” said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. “If you multiply us by the other 10,000 money managers, you get a sense of why the market is getting a little soft.”
The Dow Jones Industrial Average (^DJI) declined by 92.26 points, or 0.74 percent, to 12,409.04. The Standard & Poor’s 500 index declined by 14.43 points, or 1.08 percent, to 1,317.51. The Nasdaq Composite Index fell by 43.79 points, or 1.54 percent, to 2,796.17.
The S&P 500 and the Nasdaq have declined for three consecutive days while the Dow was on its fourth consecutive day of losses.
Corporate earnings have also been coming in relatively weak in the recent days, in comparison to the beginning of the earning season, with concern centering on some bigger industrial names.
The industrial conglomerate Emerson Electric Co. (EMR) stated that its order growth moderated in the three months to June and cautioned that U.S. and European economies have lost momentum in the last two months. The stock declined by 6.6 percent to $50.46.
Emerson’s news followed troubling signs from Caterpillar (CAT), Whirlpool (WHR), Pepsi Co. (PEP), and Ingersoll-Rand (IR), all of which were punished hard through share prices by investors.
“We started off the earnings season with a bang, but the ones that we’ve been getting in the past few days, mostly industrial ones, have been on the light side, and often pointing to an economic slowdown,” said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
Semiconductors were amongst the weakest technology shares in the market. The PHLX semiconductor index (^SOX) declined by 3.6 percent. Texas Instruments (TXN) lost 2.9 percent to $30.61.
But on the bright side, Amazon.com Inc. (AMZN) increased by 5 percent to $224.54 a day after the online retailer reported an increase in quarterly revenue.
In Washington, a Republican plan to cut the U.S. deficit faces great opposition, reducing the chances of a late compromise in order to avoid a default.
Further pressuring the market, new orders for long-lasting U.S. manufacturing goods declined unexpectedly in June, and a gauge of business spending plans declined.
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