Printable Page Headline News   Return to Menu - Page 1 2 3 5 6 7 8 13
 
 
Selloff Sends Dow Down 400             04/24 15:25

   After a strong start, U.S. stocks abruptly sold off Tuesday after machinery 
maker Caterpillar said it doesn't expect to top its first-quarter profit for 
the rest of the year.

   NEW YORK (AP) -- After a strong start, U.S. stocks abruptly sold off Tuesday 
after machinery maker Caterpillar said it doesn't expect to top its 
first-quarter profit for the rest of the year. The Dow Jones industrial average 
plunged as much as 619 points as investors feared that rising oil prices and 
other costs will slow down growth in company profits.

   Stocks climbed in early trading as companies like Caterpillar, appliance 
maker Whirlpool, and Fifth Third Bancorp posted strong quarterly results. Then 
Caterpillar executives told analysts on a conference call in the late morning 
that they don't expect the company to report a larger per-share profit for the 
rest of 2018. Other industrial, technology and basic materials companies also 
took sharp losses.

   The S&P 500 index sank 35.73 points, or 1.3 percent, to 2,634.56. The Dow 
Jones industrial average finished with a loss of 424.56 points, or 1.7 percent, 
to 24,024.13. The Nasdaq composite dropped 121.25 points, or 1.7 percent, to 
7,007.35.

   Small-company stocks held up better than the rest of the market. The Russell 
2000 index declined 8.84 points, or 0.6 percent, to 1,553.28, about half as 
much as the S&P 500, which tracks large U.S. companies.

   Caterpillar's products are used in a wide variety of industries including 
construction, power generation, mining and oil and gas drilling. Meanwhile 3M, 
which makes Post-it notes and industrial coatings and ceramics, said the rising 
price of oil and other materials is affecting its business.

   The companies' statements came as interest rates kept rising, which makes it 
more expensive for companies to borrow money. The yield on the 10-year Treasury 
note rose to 3 percent for the first time in more than four years.

   Stocks shot up at the end of 2017 and the start of 2018 as investors bet 
that the corporate tax overhaul would lead to bigger profits for American 
companies and greater economic growth. Gina Martin Adams, chief equity 
strategist for Bloomberg Intelligence, said it hasn't happened yet.

   "We're not yet seeing a very strong recovery in the broader economic numbers 
that would suggest the impact of tax reform is more than just temporary," she 
said. "The market is very impatient."

   Adams said the tax cuts may help stocks later on, but investors always want 
to see better and faster growth, and now they're not sure where that 
improvement will come from.

   The worries began to set in after construction and mining equipment maker 
Caterpillar said it doesn't expect to top its first-quarter profit for the rest 
of this year. Industrial and basic materials companies and technology firms 
took some of the worst losses.

   Wall Street had cheered Caterpillar's results earlier in the day after the 
company had a strong first quarter and raised its forecasts for the year. But 
the stock gave up those gains and finished with a loss of 6.2 percent at 
$144.44.

   3M shed 6.8 percent to $201.13. Chemical companies and other materials 
makers could also see their profits affected as oil prices and other expenses 
rise. DowDuPont shed 3.7 percent to $63.1. Elsewhere, aerospace company Boeing 
lost 2.9 percent to $329.06.

   Bond prices slipped again Tuesday. The yield on the 10-year Treasury note 
rose to 2.99 percent from 2.98 percent. Earlier it peaked at 3 percent for the 
first time since January 2014.

   Low interest rates have played an important role in the economic recovery of 
the last decade, and the yield on the 10-year note is a benchmark for many 
kinds of interest rates including mortgages. It's been climbing because 
investors expect higher economic growth and inflation.

   Since the global financial crisis in 2008-09, a combination of low inflation 
expectations and a bond-buying program by the Federal Reserve have helped keep 
bond yields low, but they have climbed this year as inflation expectations have 
picked up. The 10-year yield traded at 2.43 percent at the beginning of the 
year.

   Alphabet slid 4.8 percent to $1,022.64 after the company said ad revenue 
climbed, but expenses also rose. Google's parent company benefited from strong 
digital ad sales as well as an accounting change. Other big technology 
companies also fell, as Facebook dropped 3.7 percent to $159.69 and Microsoft 
skidded 2.3 percent to $93.12. Another market favorite, online retailer Amazon, 
shed 3.8 percent to $1,460.09.

   The dollar edged up to 108.67 yen from 108.65 yen. The euro rose to $1.2237 
from $1.2205.

   Benchmark U.S. crude oil shed 1.4 percent to $67.70 a barrel in New York. 
Brent crude, used to price international oils, fell 1.1 percent to $73.86 per 
barrel in London.

   Wholesale gasoline lost 1.4 percent to $2.09 a gallon. Heating oil dipped 
0.6 percent to $2.13 a gallon. Natural gas rose 1.5 percent to $2.78 per 1,000 
cubic feet.

   Gold rose 0.7 percent to $1,333 an ounce. Silver climbed 0.7 percent to 
$16.70 an ounce. Copper rose 1 percent to $3.14 a pound.

   Germany's DAX lost 0.2 percent while the French CAC 40 added 0.1 percent and 
Britain's FTSE 100 rose 0.4 percent. Japan's benchmark Nikkei 225 rose 0.9 
percent, helped by the weaker yen. The Kospi in South Korea lost 0.4 percent 
and Hong Kong's Hang Seng added 1.4 percent.


(BE)

 
 
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN