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Dow tumbles 425 points

Investors are in a rotten mood Tuesday.Seemingly good results from Dow components Caterpillar, Coca-Cola and U...

Posted: Apr 24, 2018 8:39 PM
Updated: Apr 24, 2018 8:39 PM

Investors are in a rotten mood Tuesday.

Seemingly good results from Dow components Caterpillar, Coca-Cola and United Technologies didn't please Wall Street. The Dow was down 500 points in midday trading after opening with a 130-point gain. At its worst point of the day, the Dow was down more than 600 points.

The Dow has now fallen for the past five straight days and has given up its gains for the year.

But why the nearly 650-point swing in the Dow in a matter of hours? Once investors took a closer look at the results, they focused on the negatives.

Caterpillar, for example, warned that profit margins would probably not get any higher this year than they are now.

And Coke investors were disappointed that lower prices may have helped drive sales -- even though Diet Coke finally returned to growth. Shares of Caterpillar plunged 6% while Coke's stock was down more than 2%.

Verizon was one of the few companies that posted strong results Tuesday that didn't seem to have any caveats -- and it was rewarded for it. Shares of Verizon rose 2%.

But other earnings reports were downright gloomy. 3M, another Dow component, lowered its outlook for the year. That sent its stock plunging nearly 10%. Insurance company Travelers, also in the Dow, fell 4% after its earnings missed forecasts.

All this negativity dragged down other old-school, classic industrial Dow companies too. Boeing and DowDuPont both fell more than 3%.

And tech investors were disappointed by increased expenses at Google parent Alphabet.

Related: Why everyone is stressing about the 10-year Treasury

Even though Alphabet posted solid gains in earnings and revenue that easily topped Wall Street's estimates, the stock fell 5% -- and that helped dragged down the S&P 500, Nasdaq and tech titans Apple, Amazon, Microsoft and Facebook.

It didn't help that the yield on the 10-year US Treasury note rose above 3% for the first time in more than four years Tuesday morning.

If this benchmark bond rate keeps climbing, it may make it more expensive to borrow money for mortgages and auto loans and could eat into profits at big US companies -- especially since the Federal Reserve is expected to keep raising short-term rates.

Still, one expert said investors may be overreacting to the moves in the bond market.

"I don't know that there is any magic to the 3.0% level other than it is a nice round number," said Jeff Mills, co-chief investment strategist for PNC Financial Services Group. "There is no rule that says rising rates are bad for the stock market."

Mills added that since 1928, stocks have actually done a little bit better when rates have gone up. The market has gained about 11% on average during years that rates have gone up and 9% in years of falling rates.

But jittery investors don't seem to care about historical market facts right now. They are selling first and asking questions later.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 69374

Reported Deaths: 1989
CountyConfirmedDeaths
Hinds5768121
DeSoto375331
Harrison265136
Madison248972
Jackson239145
Rankin232238
Jones194762
Forrest185857
Washington172244
Lee156342
Lauderdale143993
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Lamar124115
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Lowndes110240
Panola109117
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Lafayette101820
Scott101720
Copiah97128
Leflore95968
Pike95137
Holmes92349
Yazoo87013
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Grenada85626
Lincoln84643
Monroe83155
Simpson82131
Leake79927
Coahoma78913
Wayne78921
Tate74630
Marshall7299
Union70017
Marion68921
Adams64226
Covington63715
Winston63516
George6038
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Newton55511
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Tunica3657
Montgomery3456
Clarke34328
Lawrence3298
Yalobusha31810
Humphreys29912
Quitman2751
Carroll26211
Greene26213
Perry2488
Webster24813
Amite2406
Jefferson Davis2406
Kemper24014
Stone2245
Wilkinson22013
Sharkey2065
Jefferson1967
Benton1541
Choctaw1384
Franklin1352
Issaquena272
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 100801

Reported Deaths: 1814
CountyConfirmedDeaths
Jefferson13463261
Mobile10671216
Montgomery6955153
Madison551035
Tuscaloosa432780
Unassigned398568
Baldwin371029
Shelby336137
Marshall319938
Lee272447
Morgan242520
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DeKalb185214
Calhoun182819
Elmore176739
Walker154865
Houston145013
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St. Clair137520
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Lauderdale120320
Autauga118822
Escambia109417
Jackson10724
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Tallapoosa87679
Dale85029
Chambers84838
Chilton8279
Blount8255
Clarke82110
Coffee7796
Butler77336
Covington74621
Pike7167
Marion58726
Barbour5816
Lowndes57524
Marengo56817
Bullock49211
Hale48826
Winston45711
Bibb4535
Washington44913
Perry4464
Wilcox43610
Monroe4246
Pickens41110
Randolph40311
Conecuh39410
Sumter36618
Lawrence3563
Macon34114
Crenshaw3318
Choctaw28912
Cherokee2798
Clay2775
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Henry2643
Greene25311
Lamar2302
Fayette2235
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