Stocks fall on grim Caterpillar outlook
Stocks were tugged lower Wednesday by a grim earnings report from the world's largest construction equipment company. That makes two consecutive days of losses for stocks, the first time that's happened all month.
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Financial firms, such as Goldman Sachs and Capital One, have posted the highest rate of earnings growth of any industry. Pull their results out of the total, however, and earnings are on track to slump 3.5 percent, according to FactSet.Skip to next paragraph
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"You can't call this a blowout quarter so far," McMillan said.
Another 25 big companies, including Visa and Qualcomm, are releasing reports after the closing bell. Among them, Facebook surged 14 percent to $30.31 in after-hours trading after reporting income and revenue that easily beat analysts' estimates.
Surging demand for pickup trucks in the U.S. helped Ford Motor post higher quarterly profits. Sales in China also jumped 47 percent in the first six months of the year. The second-largest car company in the U.S. raised its profit forecast and its stock climbed 43 cents, or 3 percent, to $17.37.
AT&T dropped 41 cents, or 1 percent, to $35.40. Higher costs hit AT&T's profits in the latest quarter. The company's coffers were drained by smartphone sales, which it subsidizes in the hope of making money back over the life of two-year contracts.
In Europe, a broad gauge of economic activity reached the highest level since January 2012, sending stock markets in Germany and France higher. Financial information company Markit said Wednesday that its monthly purchasing managers' index for the countries that use the euro currency increased for the fourth month running.
France's CAC 40 rose 1 percent and Germany's DAX gained 0.8 percent.
The report out of Europe pushed prices for U.S. government bonds down and their yields up. The yield on the 10-year Treasury note rose to 2.58 percent from 2.51 percent late Tuesday.
Signs of economic strength usually lead traders to sell Treasurys, considered one of the safest places in the world to park cash.
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