US stocks fell about 1.5 percent in late morning trading on Thursday as Caterpillar's sales forecast cut dragged down industrials and exacerbated concerns of slowing global economic growth. Caterpillar fell as much as 7.9 percent to its lowest level since 2010 after the world's biggest mining and construction equipment maker slashed its 2015 revenue forecast and said it could cut up to 10,000 jobs.
"The (Caterpillar) news is not helping matters, it's emblematic of a weaker global economy," said Joseph Quinlan, chief market strategist for US Trust, in New York. People shouldn't be surprised but when you get those big headline numbers, that subtracts from confidence obviously."
Caterpillar was the biggest drag on the Dow and pulled down shares of other industrial companies. The S&P industrials index fell 1.83 percent, the biggest decliner among the 10 major S&P sectors. Mining equipment maker Joy Global fell 4.5 percent, while Dow component Boeing was down 3.3 percent and General Electric declined 1.8 percent. Investors will look for clues regarding the timing of a rate hike when Fed Chair Janet Yellen delivers a speech on inflation at 5 pm ET (2100 GMT).
The US equity market has been skittish since last Thursday, with the S&P 500 losing 2.8 percent up to Wednesday's close. The CBOE Volatility index, known as Wall Street's "fear gauge", jumped 11.2 percent to 24.65, above its long-term average of 20. At 10:49, the Dow Jones industrial average was down 237.37 points, or 1.46 percent, at 16,042.52. Caterpillar shaved off 31 points.
The S&P 500 was down 25.55 points, or 1.32 percent, at 1,913.21 and the Nasdaq composite was down 70.93 points, or 1.49 percent, at 4,681.82. Nine of the 10 major S&P sectors were lower. Only the utilities sector eked out a gain of 0.25 percent as the US 10-year treasury yield hit 4-week lows.
Comments
Comments are closed.