US markets slip on earnings concern and growth worries

The US markets slipped on Wednesday, with the S&P 500 Index ending lower for a fourth consecutive trading session, amid mounting concerns about global economic growth and after aluminum producer Alcoa Inc. cut its global demand outlook and Chevron Corporation warned of lower earnings. Alcoa Inc., the aluminum company reported third-quarter profit that topped expectations on increased demand from airplane and automobile makers, but trimmed its forecast for the world’s appetite for the metal it produces, citing China’s economic slowdown. In addition to earnings, investors took in the latest edition of the Federal Reserve’s latest snapshot of economic conditions across its 12 districts. The US economy continued to grow modestly across much of the nation in the past month, the Federal Reserve reported. Reports from the twelve Fed districts indicated that economic activity generally expanded modestly since the last report, the Fed stated in its Beige Book, which is an anecdotal account of the economy produced by economists in the 12 regional Fed banks. Separately, the Mortgage Bankers Association reported mortgage applications fell 1.2% last week compared to the previous week. The Census Bureau stated that wholesale trade rose 2.1% in August versus the same month last year.

In Europe, the International Monetary Fund stated in its latest assessment that risks to global financial stability have increased and revised higher the amount of assets banks may have to sell to complete the deleveraging process. Besides, Standard & Poor’s downgraded Spain’s long-term credit rating to one notch above junk, to BBB- from BBB+, because of mounting risks to the country’s public finances. The outlook is negative. The ratings agency stated that tensions between Spain’s regional governments and the central government are rising, leading to less effective policy decisions.

The Dow Jones Industrial Average lost 128.56 points, or 0.95 percent, to close at 13,345.00, the S&P 500 finished down by 8.92 points, or 0.62 percent at 1432.56, while the Nasdaq ended lower by 13.24 points, or 0.43 percent to settle at 3051.78.

Indian ADRs closed in red on Wednesday, ICICI Bank was down by 0.62%, HDFC Bank was down 0.62%, Infosys was down by 0.59%, Tata Motors was down by 0.21% and Dr. Reddy’s Lab was down 0.18%.