The US markets ended lower on Monday as investors confronted the latest signs that economic malaise in China is crimping corporate profits in the US. Sentiment was down after weaker-than-expected quarterly earnings and guidance from Caterpillar, as well as a big revenue forecast cut from chipmaker Nvidia, stoked fears about the Chinese economy slowing. Caterpillar shares fell 9.1 percent after the industrial giant posted weaker-than-expected earnings for the fourth quarter. The company said its sales in the Asia/Pacific region declined because of lower demand in China. Caterpillar is considered a bellwether for global trade given the company's exposure to overseas markets. The company also issued disappointing guidance. Meanwhile, Nvidia dropped 13.8 percent after slashing its fourth-quarter revenue guidance to $2.2 billion from $2.7 billion. The chipmaker said deteriorating macroeconomic conditions, particularly in China, impacted demand for its graphics processing units.
Wariness seeped in the markets ahead of the Fed meeting and a huge week for earnings with 126 S&P 500 companies slated to report quarterly results. The central bank will convene a two-day meeting on Tuesday, with no change in key interest rates expected. Attention is instead likely to focus on a news conference afterward with Fed Chairman Jerome Powell for any clues on future policy.
Dow Jones Industrial Average dropped 208.98 points or 0.84 percent to 24528.22, Nasdaq declined 79.18 points or 1.11 percent to 7085.69 and S&P 500 was down by 20.91 points or 0.78 percent to 2643.85.
