Stocks Plunge Amid Gathering Storm of Economic Concerns
*By Carlo Versano*
Stocks plunged worldwide Tuesday amid a multitude of headwinds that added to a sense among investors that global economic growth was headed for a slowdown.
In the U.S. markets, it was exemplified by disappointing earnings from two industrial bellwethers that are highly exposed to global economic trends, Caterpillar and 3M. The Dow Industrials fell as much as 550 points in morning trading, though had pared its losses slightly my mid-session. The S&P and NASDAQ both also traded sharply lower, with the latter re-entering correction territory, down more than 10 percent from its highs at the lows of the day.
Equipment maker Caterpillar ($CAT) beat expectations on its quarterly profit but predicted rising material costs, due in part to Chinese tariffs.
That was enough to send shares down 5 percent.
3M ($MMM) also disappointed on an all-around poor quarter. The multinational conglomerate that makes products ranging from Post-its to traffic signals cut its outlook for 2018 citing slowing sales. That stock was down 4 percent.
Tech stocks also showed continued weakness, as investors prepare to pore over earnings from many of Silicon Valley's biggest names beginning Wednesday with Microsoft ($MSFT) and Tesla ($TSLA).
Tesla, incidentally, was one of the few bright points in the markets Tuesday. Shares were up almost 10 percent after noted short-seller Andrew Left at Citron Research said he was [positive on the stock](https://citronresearch.com/citron-reverses-opinion-on-tesla/), calling the story "too compelling to ignore."
Markets overall are in the midst of a volatile October after rising mostly unimpeded for the last year. The volatility index ($VIX), which gauges fear in the market, rose above the key level of 24 again in early trading, indicating a widespread sell-off.
The Dow is on pace for its biggest monthly drop since August 2015, and the S&P, Nasdaq, and Russell are all having their worst months since 2011.
An independent watchdog within the IRS reports that while taxpayer services have vastly improved, the agency is still too slow to resolve identity theft cases. And National Taxpayer Advocate Erin Collins says those delays are “unconscionable.” Erin M. Collins said in the report released Wednesday that overall the 2024 filing season went smoothly, though IRS delays in resolving identity theft victim assistance cases are worsening. It took nearly 19 months to resolve self-reported identity theft cases as of January, and Wednesday's report states that now it takes 22 months to resolve these cases.
Amazon.com Inc. surpassed $2 trillion in market value for the first time in afternoon trading on Wednesday. The push higher for Amazon’s stock market valuation comes a little more than a week after Nvidia hit $3 trillion and briefly became the most valuable company on Wall Street. Nvidia’s chips are used to power many AI application and its valuation has soared as a result. Amazon has also been making big investments in AI as global interest has grown in the technology. Most of the company’s focus has been on business-focused products.
