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.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 25208

Reported Deaths: 1060
CountyConfirmedDeaths
Hennepin8514616
Ramsey3075128
Stearns203013
Nobles15445
Anoka142970
Dakota134957
Washington64532
Olmsted63410
Kandiyohi4971
Rice4622
Scott4362
Clay42728
Mower3452
Wright3202
Todd3190
Sherburne2462
Carver2182
Benton1783
Steele1600
Blue Earth1420
Martin1325
Freeborn1250
St. Louis11814
Pine890
Unassigned8810
Nicollet8810
Winona8015
Cottonwood760
Watonwan750
Carlton750
Crow Wing712
Otter Tail700
Goodhue683
Chisago621
Polk612
Lyon570
Itasca5510
Dodge530
Chippewa511
Morrison470
Meeker450
Douglas440
Le Sueur441
Becker400
Murray390
Jackson390
McLeod370
Isanti350
Waseca260
Rock220
Swift190
Mille Lacs191
Pennington190
Faribault190
Wabasha180
Fillmore171
Sibley160
Brown162
Beltrami150
Cass142
Norman130
Marshall120
Pipestone120
Kanabec111
Wilkin113
Wadena100
Koochiching90
Pope90
Aitkin80
Mahnomen61
Yellow Medicine60
Big Stone60
Lincoln50
Redwood50
Renville50
Red Lake40
Grant40
Lac qui Parle30
Clearwater30
Traverse30
Houston20
Hubbard20
Roseau20
Lake10
Kittson10
Stevens10

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 19669

Reported Deaths: 555
CountyConfirmedDeaths
Polk4236133
Woodbury276136
Black Hawk174745
Linn95379
Dallas91623
Marshall89616
Buena Vista8100
Johnson6149
Wapello59712
Muscatine55741
Crawford5282
Tama40327
Scott36110
Dubuque34619
Louisa34511
Sioux2830
Pottawattamie2698
Jasper26017
Washington1898
Wright1780
Warren1350
Plymouth1332
Allamakee1204
Story1161
Mahaska9510
Poweshiek908
Henry711
Bremer696
Des Moines651
Boone650
Clinton641
Taylor560
Clarke560
Guthrie513
Cedar481
Benton431
Hamilton430
Webster421
Monroe385
Shelby370
Jones360
Clayton343
Osceola340
Buchanan330
Iowa330
Marion320
Cherokee310
Jefferson300
Cerro Gordo291
Madison292
Lee270
Fayette270
Monona250
Winneshiek240
Lyon240
Davis230
Harrison230
Dickinson210
Sac200
Grundy200
Mills190
Floyd191
Humboldt181
Clay170
Delaware171
Hardin170
Butler171
Lucas170
Emmet160
Hancock160
Appanoose143
Ida140
Page140
Franklin140
Keokuk140
Pocahontas130
Greene130
Howard120
Cass120
Audubon121
Jackson120
Carroll110
Winnebago110
Chickasaw100
Kossuth100
Adair90
Van Buren90
Union90
Montgomery80
Adams70
Palo Alto70
Fremont40
Ringgold40
Mitchell40
Worth30
Calhoun20
Wayne10
Decatur10
Unassigned10
Rochester
Clear
72° wxIcon
Hi: 91° Lo: 62°
Feels Like: 72°
Mason City
Clear
72° wxIcon
Hi: 95° Lo: 64°
Feels Like: 72°
Albert Lea
Clear
72° wxIcon
Hi: 93° Lo: 62°
Feels Like: 72°
Austin
Clear
73° wxIcon
Hi: 95° Lo: 64°
Feels Like: 73°
Charles City
Broken Clouds
72° wxIcon
Hi: 93° Lo: 64°
Feels Like: 72°
Powerful storms and summer-like conditions are coming our way
KIMT Radar
KIMT Eye in the sky

Latest Video

${item.thumbnail.title}

StormTeam 3: Today's Severe Weather Update

Image

Yoga studio closes space, tries new idea

Image

Forager Brewery welcomes new business

Image

Salons reopen at 25% capacity

Image

DMC's impact on Rochester's economic recovery

Image

Forager Brewery - best patio in Rochester

Image

Protests in Mason City

Image

Barbershop town hall discusses racial profiling

Image

Minnesota salons reopen

Image

Barbershop Talk: Town hall

Community Events