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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 9:39 PM
Updated: Apr 24, 2018 9:39 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.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 918230

Reported Deaths: 15011
CountyCasesDeaths
Marion1252491952
Lake623371084
Allen52301746
Hamilton43009443
St. Joseph41155584
Elkhart32831485
Vanderburgh29698436
Tippecanoe26442247
Johnson23106414
Hendricks21708338
Porter21255340
Clark16988222
Madison16899378
Vigo15562272
Monroe14186190
LaPorte13961235
Delaware13613215
Howard13531258
Kosciusko11150134
Hancock10534159
Warrick10431174
Bartholomew10233166
Floyd10099202
Wayne9557216
Grant8858194
Morgan8654158
Boone8231109
Dubois7521123
Henry7391126
Dearborn734186
Noble7208100
Marshall7168127
Cass7060117
Lawrence6803150
Jackson638980
Shelby6386106
Gibson5999105
Harrison587984
Huntington586490
Montgomery5663101
DeKalb555691
Knox532999
Miami523183
Clinton522464
Putnam519067
Whitley509851
Steuben480267
Wabash470192
Jasper465760
Jefferson456091
Ripley439074
Adams435565
Daviess4008106
Scott389563
White383457
Decatur376895
Clay376455
Greene375589
Wells375183
Fayette363074
Posey351841
Jennings341756
Washington324046
LaGrange312074
Spencer310734
Fountain306553
Randolph302087
Sullivan294947
Owen275961
Orange269659
Starke268961
Fulton264451
Jay248134
Perry244950
Carroll239926
Franklin229337
Vermillion225850
Rush225530
Parke212020
Tipton205354
Pike200938
Blackford163834
Pulaski155250
Crawford140818
Benton138316
Newton138141
Brown130646
Martin124416
Switzerland122310
Warren112616
Union92211
Ohio75811
Unassigned0461

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1319265

Reported Deaths: 21265
CountyCasesDeaths
Franklin1480641537
Cuyahoga1311202313
Hamilton948871307
Montgomery647451122
Summit548531041
Lucas49502853
Butler45993649
Stark39954963
Lorain30438525
Warren29170326
Mahoning25988629
Clermont24726278
Lake24088411
Delaware21722140
Licking19822239
Fairfield19780218
Greene19671266
Medina19208285
Trumbull19195506
Clark17188321
Portage15585224
Richland15540228
Wood15187208
Allen13654254
Miami13283244
Muskingum11821148
Wayne11448234
Columbiana11100239
Tuscarawas10388264
Marion10273144
Pickaway10162128
Scioto9766124
Erie9479170
Ross8979172
Lawrence8225116
Hancock8105140
Ashtabula8083184
Geauga7976155
Belmont7791183
Jefferson7093168
Huron7087125
Union703549
Washington6823116
Athens666163
Sandusky6608132
Darke6394135
Knox6308120
Seneca6113135
Auglaize569888
Ashland5631110
Shelby555799
Mercer545188
Brown533067
Defiance5278100
Madison527368
Crawford5148113
Highland514876
Fulton508781
Clinton505379
Logan494582
Preble4788110
Putnam4733106
Guernsey439057
Williams437281
Champaign426463
Ottawa425783
Perry414051
Jackson402259
Pike367140
Morrow359149
Fayette353951
Coshocton345064
Hardin341868
Adams338864
Gallia329254
Holmes3148107
Henry312668
Van Wert299269
Hocking280467
Wyandot271858
Carroll250451
Paulding231742
Meigs197842
Monroe178649
Noble160340
Morgan153528
Harrison145740
Vinton130217
Unassigned05
Fort Wayne
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Huntington
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Decatur
Partly Cloudy
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Van Wert
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An area of high pressure will pave the way to plenty of sunshine as we round out the work week.
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