Wall Street was a sea of red Wednesday as investors digested negative news from China and US corporate earnings diappointed.
Reports said China's banks have tripled bad debt write-offs in the first half of the year, while machinery and equiment major Caterpillar shares fell after it lowered its earnings expectations.
The Dow Jones dropped around half a per cent to 15,406, while S&P 500 fell 0.67%. The tech heavy Nasdaq also was down in the dumps, losing 0.78% to stand at 3,900 at the time of writing.
Machinery giant Caterpillar cut its full year forecast after reporting a third-quarter profit of US$946 million compared to US $1.7 billion a year earlier.
The firm cited a combination of less mining and declining demand for new equipment as a reason for the poor performance.
Meanwhile, shares in aircraft firm Boeing rose 4.3% after boosting its full-year earnings estimate.
On S&P the biggest loser was Silicon valley based Altera Corp, which lost 11.7%.
In the UK, FTSE 100 failed to make it ten straight days of gains as banks and miners dragged the index lower.
Concerns about the state of China’s banks were partly to blame, bringing the index down 40 to stand at 6,656.
The index passed 6,700 for the first time in five months on Tuesday after some disappointing US jobs numbers filled investors with hope that tapering will not happen for the foreseeable future.
There were also fears that American banks are looking to slap more fines on British banks after JPMorgan’s huge $13 billion penalty from the US Department of Justice.
Telecoms giant BT (LON:BT.A) was among the losers as it was downgraded to ‘sell’ by UBS.
It comes amid infrastructure constraints in the North Sea, and as exports from the Chim Sáo field in Vietnam suffered a leak.
The target price of £3 suggests the shares will lose £1.30 of their value by next year, sparking a 3.2% fall to £4.30 today.
It may be a first mover, but the French broker thinks its business model makes it vulnerable to copycats.
“With the time, money and motivation, much of what Ocado has done could be replicated we believe.”
In small caps, Wasabi Energy (LON:WAS) jumped another 18% after it welcomed the deal to build Britain’s first nuclear power plant in a generation.
Hinkley Point C in Somerset could serve to lift wholesale prices, which would make its Kalina Cycle heat recycling technology attractive to power companies, it claimed today.
“If the proposed Hinkley Nuclear Power Plant strike price of £92.50 per megawatt hour is reflected in the wholesale cost of electricity within the UK, the Kalina Cycle® projects being promoted by Wasabi Energy will become exceedingly attractive,” said chairman John Byrne.