Wall Street opens lower after Citi results, China trade data

US stocks opened lower on Monday in broad-based declines after Citigroup posted an unexpected fall in revenue, adding to fears of a sharper slowdown in global economic growth that resurfaced after data showed an unexpected drop in China's trade, reports Reuters.

The Dow Jones Industrial Average .DJI fell 115.42 points, or 0.48 per cent, at the open to 23,880.53. The S&P 500 .SPX opened lower by 15.95 points, or 0.61 per cent, at 2,580.31. The Nasdaq Composite .IXIC dropped 63.45 points, or 0.91 per cent, to 6,908.03 at the opening bell.

An earlier report adds: Wall Street was set to open lower on Monday, after Citigroup kicked off the earnings season on a dour note, adding to worries over a slowdown in global economic growth that resurfaced after data showed an unexpected drop in China's trade.

Citigroup Inc fell 0.7 per cent in premarket trading after reporting a surprise drop in quarterly revenue, hurt by volatility in financial markets at the end of the year.

Other US banks including JPMorgan Chase & Co, Goldman Sachs Group Inc, Morgan Stanley and Bank of America Corp dropped between 0.8 per cent and 1.1 per cent. They are set to report later this week.

Sentiment was already weak after dismal December trade readings from China reinforced concerns that US tariffs on Chinese goods are taking a toll on the world's second-largest economy, prompting profit warning from companies such as Apple Inc.

Shares of chipmakers, which get a large portion of their revenue from China, took a hit. Advanced Micro Devices Inc and Micron Technology Inc fell 1.4 per cent and 3.0 per cent respectively.

Shares of trade-sensitive Boeing Co fell 1.4 per cent and those of Caterpillar Inc were down 1.6 per cent.

Another negative for the markets was a partial US government shutdown, which entered its 24th day, making it the longest shuttering of federal agencies in US history as an impasse over Trump's demand for funds to build a wall along the US-Mexico border dragged on.

"The market has just recouped to a level where you are starting to see some profit taking so any concerns relating to China, trade or the government shutdown will probably weigh on the market more than it would've last week," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

"We're seeing some cautiousness heading into the beginning of earnings season as people are worried about guidance and what companies are going to say, especially in relation to trade."

At 8:43 a.m. ET, S&P 500 e-minis were down 0.72 per cent. Dow e-minis were down 0.74 per cent while Nasdaq 100 e-minis were down 0.87 per cent.

Analysts expect S&P 500 companies to post a 14.5 per cent growth in fourth-quarter earnings, according to IBES data from Refinitiv. Profit for 2019 is likely to increase by 6.4 per cent this year, much slower than 23.5 per cent growth in 2018.

Still, optimism over China-U.S trade and hopes of a slow pace of interest rate hikes from the Federal Reserve has fueled a strong run in stocks recently, pulling the S&P 500 10 per cent higher from its 20-month low hit on Christmas Eve.

The benchmark index is 12.9 per cent away from its Sept 20 closing high.

Among other stocks, PG&E Corp plunged 46.6 per cent after the biggest US power utility said it is preparing to file for Chapter 11 bankruptcy for all of its businesses.