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15-Jan2019

US markets settle lower on signs of slowing economic growth

The US markets ended in red on Monday after downbeat Chinese economic data added to signs of slowing growth around the world. Data from China's General Administration of Customs showed exports tumbled by 4.4 percent Year-over-Year in December, reflecting the biggest drop in two years. Street had expected exports to increase by 3 percent. The report also said Chinese imports plunged by 7.6 percent in December compared to the same month a year ago, defying expectations for a 5 percent jump. Besides, investors were jittery as the US corporate earnings season kicked off on Monday, with Citigroup reporting stronger-than-expected earnings. Though, the bank also said its fixed-income trading revenue fell 21 percent.

Corporate profits grew massively in the first three quarters of last year, expanding by at least 25 percent in those time periods. S&P 500 earnings are expected to have grown by 12.6 percent in the fourth quarter. One of the big concerns for investors has been how much earnings growth will slow. Expectations for fourth-quarter earnings have come down a lot over the last month or two. So the reassurance or worry is going to be if companies lower guidance and say 2019 looks to be a challenging year than it's already baked in. Meanwhile, a lack of major US economic data also kept some traders on the sidelines along with uncertainty about the impact of the ongoing government shutdown.

Dow Jones Industrial Average dropped 86.11 points or 0.36 percent to 23909.84, Nasdaq declined 65.56 points or 0.94 percent to 6905.92 and S&P 500 was down by 13.65 points or 0.53 percent to 2582.61.


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