By Stephen Culp
NEW YORK (Reuters) - Wall Street ended its four-day rally on Tuesday as a gloomy global economic growth outlook and disappointing company forecasts dampened investor spirits at the height of fourth-quarter reporting season.
All three major U.S. stock indexes extended their losses after the Financial Times reported the Trump administration rejected an offer from China for preparatory talks ahead of next week's high-level trade negotiations.
The International Monetary Fund trimmed its 2019 global economic growth estimates on Monday, the same day data from China confirmed the country's slowest economic growth rate in 28 years.
"There's so much in the background - trade, government shutdown, earnings season - you're going to have these big swings in the markets based on the latest data," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
"(Investors) are getting more bearish and less optimistic about the outlook," Nolte added. "We had a momentum low on Christmas Eve and I think we'll wind up testing it over the next couple months or so."
The downbeat China news pulled chipmakers lower, with the Philadelphia SE Semiconductor index <.SOX> falling 3.1 percent.
Each of the FAANG momentum stocks, a group which includes Facebook Inc
Fears of a slowdown in corporate profits were exacerbated as companies posting fourth-quarter results provided disappointing forward-looking projections.
Johnson & Johnson
Shares of Stanley Black & Decker Inc
The Dow Jones Industrial Average <.DJI> fell 398.96 points, or 1.61 percent, to 24,307.39, the S&P 500 <.SPX> lost 45.21 points, or 1.69 percent, to 2,625.5 and the Nasdaq Composite <.IXIC> dropped 148.39 points, or 2.07 percent, to 7,008.84.
All 11 major sectors of the S&P 500 were in the red, with the largest percentage losses coming from industrials <.SPLRCI>, communications services <.SPLRCL> and tech <.SPLRCT>.
With just over 12 percent of S&P 500 companies having reported thus far, 78.7 percent of have beat Street expectations. Analysts expect S&P 500 fourth quarter earnings growth of 14.1 percent, down from 20.1 percent on Oct. 1, according to Refinitiv data.
Oilfield services company Halliburton Co
Travelers Cos Inc
Amid the government shutdown-related dearth of U.S. economic data, a report from the National Association of Realtors showed sales of existing homes in the United States fell in December to their lowest level in three years.
The PHLX Housing index <.HGX> was down 1.9 percent.
Declining issues outnumbered advancing ones on the NYSE by a 3.83-to-1 ratio; on Nasdaq, a 3.14-to-1 ratio favoured decliners.
The S&P 500 posted 3 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 18 new highs and 26 new lows.
(Reporting by Stephen Culp; Editing by Nick Zieminski)
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Updated Date: Jan 23, 2019 02:05:27 IST