Caterpillar (NYSE:CAT) dropped as much as 7.9 percent to its lowest level since 2010 after the world’s largest mining and construction equipment manufacturer slashed its 2015 earnings outlook and said it could cut up to 10,000 jobs.
Individuals should not be surprised when these huge headline amounts affects confidence.”
Caterpillar pulled down shares of other industrial firms and was the largest drag on the Dow. The S&P industrials index fell 1.83 percent, the largest decliner among the 10 leading S&P sectors.
Mining gear manufacturer Joy Global (NYSE:JOY) dropped 4.5 percent, while Dow component Boeing (NYSE:BA) was down 3.3 percent and General Electric (NYSE:GE) dropped 1.8 percent.
Concerns of slowing global economic growth was among the reason mentioned by the Federal Reserve for maintaining rates on Thursday.
Investors will try to find hints about the timing of a rate increase when Fed Chair Janet Yellen gives a speech on inflation at 5 p.m. ET (2100 GMT).
The CBOE Volatility index, called Wall Street’s “fear gauge”, jumped 11.2 percent to 24.65, above its long term average of 20.
Caterpillar shaved 31 points off.
Nine of the 10 leading S&P sectors were lower. Just the utilities sector eked out a gain of 0.25 percent as the U.S. 10-year treasury yield reach 4-week lows.
Quinlan said better-than-anticipated gains could behave as a circuit breaker to the lack of confidence permeating the marketplace.
Nevertheless, earnings of S&P 500 firms are anticipated to fall 3.9 percent in the third quarter from a year ago, Thomson Reuters data shows.
A gauge of U.S. company investment strategies dropped marginally in August while the number of Americans filing new applications for jobless benefits just grew last week, signs that international economic conditions are affecting the US.
Some good news though: new U.S. single-family home sales increased far quicker than anticipated in August, pointing to a strengthening recovery in America’s housing market.
In other news, Nike (NYSE:NKE) and Bed Bath & Beyond (NASDAQ:BBBY) are anticipated to report quarterly results following the market closes.
Wrapping up the day; declining shares outnumbered advances on the NYSE by 2,312 to 531. On the Nasdaq, 1,929 stocks fell and 602 gained. Finally, the S&P 500 index revealed no new 52-week highs and 60 new lows, while the Nasdaq recorded 10 new highs and 140 new lows.