NEW YORK (AFP) – Earnings Tuesday from American multinationals revealed a downside to the comparatively robust US economy: the drag from a rising dollar.
Dow component Procter & Gamble cited “unprecedented” foreign-exchange fluctuations as it missed earnings expectations and slashed its profit outlook.
Chemical producer DuPont and technology giant Microsoft also highlighted the strong greenback as a headwind for earnings, adding to commentary last week from fast-food chain McDonald’s and consumer goods firm Kimberly-Clark.
The meager results were the main catalyst of the stock market’s sell-off Tuesday, which pared nearly 300 points from the Dow.
“What it says is US companies are not immune to global weakness,” said Christine Short, senior vice president at Estimize, a financial tech company that collects earnings research.
Foreign exchange “is going to be a big impact,” she added.