Daily Data Flow: Stocks Drop on Weak Earnings Reports; Lessons from 1987 Market Crash

Stocks Drop Most Since June on Earnings; Metals, Oil Fall (Bloomberg)
U.S. stocks slid the most since June and Treasuries rose as companies from General Electric Co. to McDonald’s Corp. and Microsoft Corp. posted results below estimates, while euro-area leaders failed to discuss aid for Spain at a summit. Metals and oil led a slump in commodities. Stocks slid on the 25th anniversary of the worst one-day crash in U.S. history as profits trailed analyst estimates at half of the 18 companies in the S&P 500 that released results since the close of trading yesterday, eroding confidence in an earnings season that had seen about three-quarters of the companies beat forecasts.

10 Lessons From the Market Crash of 1987 (Marketwatch)
Twenty-five years ago, on Oct. 19,1987, the Dow Jones Industrial Average plunged almost 23%, its largest one-day percentage-point drop ever. While the crash didn’t usher in another Great Depression, it did introduce investors to a new era of stock-market volatility. With that in mind, MarketWatch polled several money managers who witnessed Black Monday about lessons from 1987 that are relevant to investors today.

Gold has Biggest One-Day Drop Since July on Economic Fears (Reuters)
Gold fell more than 1% to a one-month low on Friday, its biggest daily drop in more than three months. Gold was hit by technical selling and tumbling U.S. equities amid economic uncertainty around the world. “People who rushed in for QE expecting to get a significant lift are getting out of the market,” said Frank McGhee, head precious metals trader of Integrated Brokerage Services LLC. “The longer we don’t make a new high, the more people start getting nervous about where gold is trading.”