Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average sank Monday, led lower by Caterpillar Inc. (CAT - Get Report) , which missed analysts' earnings estimates.
  • Caterpillar declined 9.13% after its posted weaker-than-expected fourth-quarter earnings and forecast a "modest" in increase in 2019 sales.
  • Nvidia Corp. (NVDA - Get Report)  tumbled 13.8% after slashing its revenue forecast for the fourth quarter because of weak demand.

Wall Street Overview

Stocks declined sharply on Monday, Jan. 28, after Caterpillar Inc. (CAT - Get Report)  issued a profit warning and Nvidia Corp. (NVDA - Get Report) slashed its revenue forecast for the fourth quarter.

Caterpillar posted weaker-than-expected fourth-quarter earnings and forecast a "modest" in increase in 2019 sales, sending shares in the industrial equipment maker down 9.13%.

Caterpillar also said it expects 2019 profit to increase to a range of $11.75 to $12.75 a share, compared to the Refinitiv consensus forecast of $12.73.

Nvidia slid 13.8% after the chipmaker cautioned that quarterly revenue would fall far short of analysts forecasts following weaker-than-expected demand for its gaming and datacenter products and slowing growth in China.

Nvidia said sales for the three months ended jan. 27, its fiscal fourth quarter, would come in at $2.2 billion compared to earlier guidance of $2.7 billion. The company also said GAAP and non-GAAP margins would be hit by charges of around $120 million, adding that after a number of deals for its 'turing' graphics chips failed to close over the final months of the year.

Fellow chipmakers tumbled after Nvidia slashed guidance. Micron Technology Inc. (MU - Get Report)  was down 2.26%, Advanced Micro Devices Inc. (AMD - Get Report) dropped 8% and Intel Corp. (INTC - Get Report) fell 0.7%.

Meanwhile, investor optimism linked to Donald Trump's decision to sign a bill that funds the government until Feb. 15 faded in the wake of comments he made during an interview with The Wall Street Journal, as well as on social media, that he may double-down on his demand for $5.7 billion in border wall funding when talks between lawmakers resume this week.

"I personally think it's less than 50-50, but you have a lot of very good people on that board," Trump told the Journal when asked about the chances for a longer-term government funding bill, adding that another shutdown next month was "certainly an option."

Investors also were in a cautious mood following data from China that showed industrial profits for December fell by a more-than-expected 1.9%, the second monthly decline and a figure that brings the 2018 tally to 10.3%, around half the pace of 2017 and further cementing concerns of a slowdown in the world's second-biggest economy.

The Dow Jones Industrial Average dropped 209 points, or 0.84%, to 24,528, the S&P 500 fell 0.8%, and the Nasdaq tumbled 1.1%.

Besides Caterpillar, earnings are expected this week - the busiest of the fourth-quarter earnings season, from Apple Inc. (AAPL - Get Report) , Microsoft Corp. (MSFT - Get Report) , Facebook Inc. (FB - Get Report) and Inc. (AMZN - Get Report)  . The four stocks are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells the stocks? Learn more now.

Versum Materials Inc. (VSM - Get Report) and Entegris Inc. (ENTG - Get Report) reached a deal to merge, a transaction that combines two chemical companies that make critical components for the semiconductor industry.

Under the deal, shareholders of Versum Materials will receive 1.120 shares of Entegris for each existing Versum Materials share. Entegris stockholders will own 52.5% of the combined company, while Versum Materials stockholders will own 47.5%.

The combined company will have a pro forma enterprise value of about $9 billion, the companies said in a statement Monday.