Plummeting US markets put traders on watch

Tech companies lead stocks sharply lower in early trading

Tech companies lead stocks sharply lower in early trading

Chevron and Exxon, which both reported quarterly earnings to investors on Friday, were the two biggest losers on the Dow, falling more than 5 percent.

Stock futures are pointed dramatically lower this morning, with Dow Jones Industrial Average (DJI) futures trading almost 226 points below fair value after today's nonfarm payrolls report.

The group has reached an agreement with holders of a majority of its first lien debt to support a Chapter 11 plan of reorganization.

The S&P 500 fell 3.8%, while the Nasdaq declined 3.5%. Despite a strong jobs report that showed rising wages and solid unemployment numbers, investors reflected growing concern about inflation levels.

"You have a jobs report today that was pretty robust all kind of feeding into the higher interest rates, greater inflation story, and I think the markets are trying to grapple with that right now", said Carlson.

In corporate news, Motorola Solutions Inc (NYSE:MSI) climbed 6.8% to US$105.81 after announcing last night it is to acquire Canadian company Avigilon Corporation (TSE:AVO). Its shares are up just over 18% this year to $349.

Non-farm USA payrolls topped forecasts, rising by 200,000 jobs in January.

Despite the warning signals flashing for global stock markets, economists said the drop in equity prices may be a short-term trend if the world economy can continue to expand without generating too much inflation and if central banks do not hike interest rates more than anticipated.

Trading volumes were high, with the number of shares on the New York Stock Exchange expected to exceed a billion shares, or 25 percent or more above normal trading. The economic data released yesterday also showed that average hourly wages rose, pushing the yearly wage increase to 2.9 percent.

Strategies that worked for years buckled in the rout. The good news was that the economy added 200,000 jobs and continued a almost unprecedented run of job growth.

Investors said the drop was partly due to fears of rising inflation, which could lead to an increase in interest rates in the coming months.

Stocks fell sharply in early trading Friday, putting the market on track for its worst week in two years, as several large companies sank after reporting weak earnings.

Stripping away the tax gain and the write-down of operations in Canada and the Gulf of Mexico because of Exxon's long-term forecast of natural gas prices, adjusted profit was 88 cents per share.

Revenue of US$66.52bn was also way short of expectations of US$74.44bn.

Weak earnings from several giant US companies including Exxon Mobil and Alphabet, Google's parent company, further dented investors' confidence. Not necessarily, as companies look for ways to improve productivity and margins.

President Donald Trump has repeatedly taken to Twitter to tout the stock market gains as a sign of his administration's success, and cited the Dow's gains in speeches and appearances.

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