Stocks finished sharply lower on Tuesday, April 24, as earnings from Caterpillar Inc. (CAT) , despite rising, disappointed investors as the heavy machinery maker said material cost increases this year likely will come in above estimates because of higher steel prices.
The Dow Jones Industrial Average tumbled 424 points, or 1.74%, to 24,024. The S&P 500 fell 1.34%, and the Nasdaq was down 1.7%.
Market sentiment was clouded by developments in the bond market, where benchmark U.S. Treasury bond yields hit 3% on Tuesday for the first time since January 2014.
You need to be at TheStreet's May 5 boot-camp for investors. Learn more here."The 10-year inching above 3% is a symbolically important milestone, but it's not all that surprising," said Mike Loewengart, E*Trade's vice president of investment strategy. "The (Federal Reserve) has been nothing if not transparent, telegraphing its rate agenda while methodically shedding balance sheet weight. That doesn't mean there may not be some dicey moments ahead. But for now, it seems like the economy is holding up and healthy enough to take a few punches."
Caterpillar fell 6.3% after Chief Financial Officer Bradley Halverson said the company expects "steel to be a headwind all year."
Shares of Google parent Alphabet Inc. (GOOGL) fell 4.7% on Tuesday after the search giant easily beat first-quarter earnings and revenue expectations but concerns about rising costs muted the positive reaction from investors..
TheStreet's Eric Jhonsa noted how traffic acquisition costs - the ad revenue-sharing payments Google makes to the likes of phone OEMs, carriers and publishers - remained a real headwind. For the second quarter in a row, TAC equaled 24% of Google's ad revenue vs. 22% a year earlier. Johna also said elevated hardware/service costs were raising eyebrows.
10 Key Takeaways From Google's Solid Earnings ReportAlphabet is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells the stock? Learn more now.
3M Co. (MMM) beat analysts' expectations on the top line and met them on the bottom line for the first quarter, reporting earnings of $2.50 a share on revenue of $8.3 billion. But the stock tanked 6.8%.
Shares of Coca-Cola Co. (KO) were down 2% after the beverage giant reported first-quarter earnings and sales that beat Wall Street forecasts.
Verizon Communications Inc. (VZ) topped first-quarter earnings forecasts on Tuesday, amid reports the Department of Justice was investigating whether the company and other telecoms are developing technology standards that would allow them to lock some devices. Verizon shares rose 2%.
Verizon Shares Gain as Carrier Tops Q1 Earnings ForecastsUnited Technologies Inc. (UTX) topped first-quarter analysts' expectations and raised its outlook for top- and bottom-line results for 2018, noting strong sales at its Pratt & Whitney and UTC Aerospace units. The stock was down 1%.
Eli Lilly & Co. (LLY) reported first-quarter adjusted earnings of $1.34 a share, higher than estimates of $1.13. The company also raised its outlook for 2018 earnings. The stock traded down 0.15%.
Lockheed Martin Corp. (LMT) fell 6% despite beating Wall Street estimates for the first quarter and raising full-year guidance.
3M and Eli Lilly are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells the stocks? Learn more now.
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