undergroundnewsroom.com May 27, 2018

Dow Jones falls almost 425 points; Caterpillar reports earnings plateau

26 April 2018, 12:41 | Jenny Fowler

Boeing jumped 4.2 percent, helping the Dow Jones industrial average break a five-day losing streak. It reported earnings and revenue that beat expectations, sending the stock higher initially. It shed 1.4 percent to $67.70 a barrel in NY the previous day.

The Dow Jones industrial average shed as many as 620 points in mid-morning amid fears of steeper borrowing costs in America, which could force up the cost of mortgages, vehicle loans and other debt in Britain.

The Dow has recovered some of its losses as the morning progressed though and is now down 37 points at 23,987, while the S&P 500 followed in a similar vein and is just 6.2 points in the red at 2,628.3. The Nasdaq Composite was lower at 7,003.74 for a loss of -3.61 points or -0.05%.

Alphabet shares fell 4.77 per cent, erasing the stock's year-to-date gains as rising expenses and shrinking margins overshadowed the company's better-than-expected profit.

The U.S. equities fell sharply in the previous session.

"Fears of "peak earnings" are laughable considering that the average constituent in the S&P 500 has enjoyed year-over-year bottom line growth in excess of 20%", Klein wrote in a note.

Stocks got off to a weak start as investors anxious that growing costs for raw materials along with rising interest rates would hold back profit growth for US companies. The stock has been consolidating since January.

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Comcast Corporation (NASDAQ:CMCSA) was slightly off the pace in screen-based trading, shedding 2% at US$32.70, despite topping expectations with its first quarter earning. The VIX Volatility Index was lower at 17.84 for a loss of -0.18 points or -1.00%. Its stock gained 4.2 percent to $342.86 and railroad operator Norfolk Southern climbed 8.1 percent to $145.96 after it, too, surpassed analyst projections.

"While the market has focused on the psychological resistance level of 3% yields on U.S. ten year bonds, investors should not anchor themselves too much in the recent past". Brent crude, used to price global oils, fell 1.1 percent to $73.86 per barrel in London.

Economic data released Tuesday morning included a reading on home sales, which surged to a near four-year high. The euro rose to $1.2237 from $1.2205.

Wholesale gasoline lost 1.4 percent to $2.09 a gallon. Heating oil rose 0.4 percent to $2.14 a gallon.

Declining issues outnumbered advancing ones on the NYSE by a 1.94-to-1 ratio; on Nasdaq, a 1.71-to-1 ratio favored decliners.

In European trading, London's FTSE was down 0.67%.

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