In a trading day that was destined to open lower, US equities sharply fell on the open with the Dow down as much as 500 points in the first couple of hours of trading before markets recovered bouncing back to finish the session in negative territory on Tuesday. All major indexes were lower as the Dow -0.50%, S&P 500-0.55% and the Nasdaq -0.42%.
The increase in volatility was a result of poor earnings from some of the larger Dow companies that reported before that market open. Caterpillar shares, which have been in the limelight for the better part of the year due to its exposure to the trade war between the Us and China, were the worst performer on the Dow as they dropped more than 10 percent following the release of its results before closing 7.5 percent lower. The disappointing result came after rising manufacturing costs due, specifically to higher steel prices. It was a similar story for 3M shares, as they fell as much as 8.4 percent before finishing nearly 4.4 percent lower following its poor quarterly earnings, where the company missed revenue expectations along with trimming its earnings outlook for 2018.
On a lighter note, of the top performing Dow stocks, Verizon shares popped 4.1 percent along with United Technology shares rising 2.9 percent after reporting earnings that met analysts’ expectations. On the other end of the spectrum Chevron shares slumped 3.3 percent following lower oil prices. Notably, McDonald's shares also rose more than 6 percent on strong earnings.
In after-hours trading, shares of military technology company iRobot fell more than 10 percent despite beating earnings estimates. The fall came as the company expects a $5 million hit in its fourth quarter due to Presidents trumps tariffs.
Oil prices slumped 5 percent following worries on lowering oil demand after Saudi Arabia raised the possibility that it could increase supply quickly if needed- U.S. crude ended the session at $66.43 a barrel, down $2.93, after falling 5.2 percent. The US dollar remained lower against other safe haven currencies as it fell 0.32 percent against the Japanese yen last trading at 112.45 yen and against the Swiss franc the dollar was down 8 basis points, last at 0.995 francs.
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Chart of the Day: Caterpillar Inc (CAT) daily chart