Markets were under intense pressure earlier today, with the Dow Jones Industrial Average down almost 400 points. Most indexes were down 2 percent or so around the globe before recovering some of the losses.
As is often the case during big market swings, numerous narratives attempt to explain the causes of the market turmoil. Consider the following headlines:
The only genuine surprise on that list was an unexpected drop in durable goods orders of 3.4 percent in December.
Let’s take a look at the “news” that supposedly drove today’s stock market.
Caterpillar missed fourth-quarter earnings expectations and lowered forecasts for the coming year on (surprise!) plunging energy prices and slower European and Chinese sales . Procter & Gamble blamed lower earnings on the stronger U.S. dollar (shocker!), while Microsoft said that software-license sales for PCs declined (who ever could have seen THAT coming?).