Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Markets Were Crushed on the Anniversary of Black Monday

Stocks are falling fast on the 25th anniversary of Black Monday, the day the Dow Jones Industrial Average (INDEX: ^DJI  ) lost 23% in a single session. With 40 minutes left in trading, the Dow is down 1.55%, and the S&P 500  (INDEX: ^GSPC  )  has given up 1.66%. Ghosts of crashes past are on the minds of traders, but it's earnings from tech companies that have been a real drag on the market.

Microsoft's (Nasdaq: MSFT  )  shares lost 3.1% after the company reported disappointing third-quarter earnings. Sales fell 7.8% to $16 billion, and earnings per share of $0.53 were $0.03 short of estimates. Microsoft is about to launch Windows 8, as well as a new tablet built on the mobile version of the operating system, and sales suffered as IT departments and consumers put off spending until the upgrade is released.

Microsoft's results echo weakness from chip makers Intel (Nasdaq: INTC  ) and AMD (NYSE: AMD  ) , which just announced that it would cut its workforce by 15%. The PC business is clearly slowing down, and it's dragging a number of high-profile tech stocks down with it.

Caterpillar (NYSE: CAT  ) was the other big loser on the Dow, falling 3.1% after reporting a big slowdown in sales. Retail sales grew just 6% in September, down from 13% in August and 14% in July. The company has been growing quickly coming out of the recession, but with the global economy losing steam, Caterpillar is in for slower growth ahead.

It's been a challenging earnings season so far, particularly for the tech sector, and investors are losing confidence in stocks as a result. But it's important to keep in mind that Windows 8 will bring a new buying cycle, and the operating system appears to have some momentum. Presales are 40% higher than those of Windows 7, and Microsoft's new tablet, the Surface, sold out its least expensive model. Tech is down, but I wouldn't call it "out" just yet.

In our brand-new premium report on Microsoft, our analyst explains how big Microsoft's opportunity is and what the challenges are. He's also providing regular updates as key events occur, so be sure to claim a copy of this report now by clicking here.

Fool contributor Travis Hoium manages an account that owns shares of Intel and Microsoft. The Motley Fool owns shares of Intel and Microsoft. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw

Motley Fool newsletter services recommend Intel and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2066643, ~/Articles/ArticleHandler.aspx, 10/26/2016 3:33:04 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 6 hours ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:34 PM
^DJI $18169.27 Down -53.76 -0.30%
^GSPC $2143.16 Down -8.17 -0.38%
S&P 500 INDEX CAPS Rating: No stars
AMD $7.50 Up +0.50 +7.07%
Advanced Micro Dev… CAPS Rating: **
CAT $84.48 Down -1.51 -1.76%
Caterpillar CAPS Rating: ***
MSFT $60.99 Down -0.01 -0.02%
Microsoft CAPS Rating: ****