Published: Thu, April 26, 2018
Money | By Wilma Wheeler

Dow Jones falls almost 425 points; Caterpillar reports earnings plateau

Dow Jones falls almost 425 points; Caterpillar reports earnings plateau

Analysts linked the Dow's downturn to the 10-year Treasury yield rising past 3 percent Tuesday for the first time since 2014.

New York's financial district.

USA equity futures pointed to a fifth day of losses for the main indexes on Wednesday, spooked by a rise in bond yields and nerves ahead of earnings from scandal-hit Facebook.

Investors are anxious rising borrowing costs because it may slow the economy and hurt companies' ability to buy back their own stocks even.

The CBOE Volatility index .VIX , a gauge of short-term stock market volatility jumped to more than 1-week high to 18.61 points.

"Fears of "peak earnings" are laughable considering that the average constituent in the S&P 500 has enjoyed year-over-year bottom line growth in excess of 20%", Klein wrote in a note.

Boeing Co.(BA) rose 4.2% after beating first-quarter earnings expectations (http://www.marketwatch.com/story/boeing-stock-flies-on-earnings-beat-upward-guidance-2018-04-25) and hiking its 2018 earnings outlook. The Nasdaq gave up 121 points, or 1.7 percent, to 7,007.

US stocks took steep losses Tuesday despite solid corporate earnings reports as rising interest rates spurred uncertainty among investors. The stock market had already been spooked by a climb in bond yields earlier in the year, sliding sharply in February.

Australia reports quarterly import prices.

The S&P 500 also erased earlier losses, closing 0.2 percent higher at 2,639.39.

Market favorites including Alphabet and Amazon dropped Tuesday, and heavy equipment maker Caterpillar sank 6.2 percent after warning of weaker profits. "Investors are saying, 'You know, the group has had a tremendous run over the last two to three years, maybe we should take some money off the table here'".

Caterpillar warned of weaker profits and 3M, like several other manufacturers reporting their quarterly results, said it was seeing higher costs for raw materials.

So far this reporting season, more than 80% of the S&P 500 companies with reports out have beaten profit forecasts.

SMALL GOES BIG: American consumers got more confident in the economy in April, according to a survey by the Conference Board.

Facebook which is set to report after market on Wednesday, was down 0.14 percent. With the slight drop, the Nasdaq fell for a fifth straight session, its longest losing streak since November 2016 (http://www.marketwatch.com/story/nasdaq-on-track-for-longest-stretch-of-losses-since-before-trump-won-the-presidency-2018-04-25).

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