By Barry Eitel
SAN FRANCISCO (AA) – The Dow Jones Industrial Average plunged 425 points Tuesday to close at 24,024.
Shares of several companies considered bellwethers for the greater economy tumbled, with tractor maker Caterpillar, aerospace company Lockheed Martin and manufacturing conglomerate 3M all closing down more than 6 percent. The trio of companies all announced disappointing estimates for the rest of the year.
Caterpillar Chief Financial Officer Brad Halverson said during a call with investors that first quarter earnings “will be the high watermark for the year”.
The Nasdaq dropped 121 points to close at 7,007 while the S&P 500 decreased almost 36 points to 2,635.
Analysts linked the Dow’s downturn to the 10-year Treasury yield rising past 3 percent Tuesday for the first time since 2014. The note is considered an important benchmark for other rates such as mortgages. The 10-year yield has been ticking higher because of concerns about inflation and the Federal Reserve raising interest rates. Many investors now believe the Fed will hike rates four times this year.
Technology stocks slid along with their industrial counterparts. Apple, Netflix and Facebook all closed down from Monday. Google parent Alphabet fell nearly 5 percent and closed the day at $1,022.64.