Caterpillar, Amex earnings disappointments push US stocks lower
In this Wednesday, Sept. 17, 2014, photo, a Caterpillar 349E Hydraulic Excavator operates on a construction site in Miami Beach, Florida. US stocks fell for a third straight day Thursday, July 24, 2015, on the back of disappointing earnings from Caterpillar, American Express and others. AP PHOTO/WILFREDO LEE
NEW YORK–US stocks fell for a third straight day Thursday on the back of disappointing earnings from Caterpillar, American Express and others.
The Dow Jones Industrial Average fell 119.09 points (0.67 percent) to 17,731.95.
The broad-based S&P 500 dropped 12 points (0.57 percent) to 2,102.15, while tech-rich Nasdaq Composite Index lost 25.36 points (0.49 percent) at 5,146.41.
Dow members American Express (-2.5 percent), Caterpillar (-3.6 percent) and 3M (-3.8 percent) all fell sharply following earnings reports. But General Motors gained 4.0 percent after reporting second-quarter earnings that quadrupled from a year ago.
“Earnings overall have been better than expected, but still not very good,” said David Lynch, portfolio manager at Kenjol Capital Management.
“The valuations on the market are not cheap… so we’re going to need to see earnings growth for the market to make progress.”
Chipmaker Qualcomm fell 3.8 percent after announcing it would slash its workforce by 15 percent and study a possible breakup of the company. It reported that earnings for the quarter ending June 28 fell 47 percent to $1.2 billion.
Dow Chemical lost 4.5 percent as chief executive Andrew Liveris warned on a conference call that “volatility and softness” prevail in key sectors of China, a key growth market for the chemical giant.
Metals and petroleum producer Freeport-McMoRan tumbled 9.4 percent following a $1.85 billion loss due mainly to large writedowns in its oil and gas properties. The loss also coincided with a fresh multi-year low for copper prices.
Under Armour, which makes athletic apparel and gear, surged 7.3 percent after lifting its forecast. Sales for 2015 are now projected at $3.84 billion, up from the prior estimate of $3.78 billion.
Other companies to report included Comcast (-3.2 percent), Eli Lilly (+0.4 percent), McDonald’s (-0.5 percent), Kimberly-Clark (-0.5 percent) and United Airlines(-0.7 percent).
Health insurer Cigna gained 2.2 percent on reports it is near a deal to be acquired by rival Anthem for about $48 billion. Anthem added 0.1 percent.
Bank of America fell 1.5 percent after it replaced chief financial officer Bruce Thompson with human resources executive Andrea Smith, whose title will be chief administrative officer.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.27 percent from 2.33 percent Wednesday, while the 30-year dropped to 2.97 percent from 3.04 percent. Bond prices and yields move inversely.
