Dow falls on weakness from Goldman Sachs and insurer Travelers

Traders work on the floor of the New York Stock Exchange, on Jan 17, 2023. PHOTO: AFP

NEW YORK - The Dow tumbled on Tuesday following disappointing results from major investment bank Goldman Sachs and insurer Travelers ahead of key economic data later in the week.

Goldman Sachs plunged 6.4 per cent after it badly missed analyst estimates as merger revenues dove, while Travelers dropped 4.6 per cent after it disclosed US$459 million (S$600 million) in estimated catastrophe losses reflecting the hit from last month’s winter storm.

Weighed down by those two companies, the Dow Jones Industrial Average finished down 1.1 per cent to 33,910.85.

The broad-based S&P 500 dipped 0.2 per cent to 3,990.97, while the tech-rich Nasdaq Composite Index advanced 0.1 per cent to 11,095.11.

“We’re seeing a big rotation occurring beneath the surface,” said Mr Adam Sarhan of 50 Park Investments, noting that tech shares are gaining after a dismal 2022.

China reported its lowest annual economic growth in decades but still topped analyst estimates, while German investor confidence soared in January, as lower energy prices and cooling inflation boost the economic outlook.

Tuesday marks the first session of the week after markets were closed for Monday’s Martin Luther King Jr holiday.

This week’s economic calendar includes key housing data and retail sales for December.

Among individual companies, Morgan Stanley jumped 5.9 per cent after reporting better-than-expected profits, as chief executive James Gorman said a strong performance in wealth management and other divisions made up for weakness in investment banking. AFP

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