Stocks opened with gains thanks to a few solid earnings reports from some of the nation’s bellwether companies. Caterpillar (CAT) reported much better than expected earnings and revenues and raised its guidance for the full year and its stock price initially moved sharply higher. However, on the company’s conference call, the CEO said the first quarter would be the high-level mark for the year and sellers moved in selling the stock, taking the Dow down with it. From there the averages saw a broad-based selloff, with little sign of investors stepping in to buy the dip prior to the next round of reports due after the close. ECONOMIC EVENTS: In the U.S., the Case Shiller 20-City home price index rose 0.74% to 206.67 for February. The FHFA home price index rose 0.6% to 261.1 in February. The Richmond Fed manufacturing index plunged 18 points to -3 in April, hitting its lowest reading since September 2016. The Conference Board consumer confidence index increased to 128.7 in April, up from 127.0 in March. COMPANY NEWS: Class A shares of Google parent Alphabet (GOOGL) declined about 5% after the internet giant’s earnings report was followed by several Wall Street analysts trimming their price targets, citing the company’s plans to keep investing heavily in 2018. Following the report, other FAANG stocks were trading lower, with Facebook (FB), Amazon (AMZN), Apple (AAPL) and Netflix (NFLX) sliding in a range of 1% to about 4%… Six members of the Dow Jones Industrial Average reported this morning before the open. Caterpillar shares, which looked like they would head higher, reversed during the company’s earnings call amid cautious commentary from executives. At the close, shares of the heavy equipment maker finished 6% lower. Verizon (VZ), meanwhile, rose 2%, while United Technologies (UTX) fell 1%. Coca-Cola (KO) and Travelers (TRV) were down 2% and 3%, respectively, while 3M (MMM) was also an underperformer with a 7% decline following its guidance reduction. MAJOR MOVERS: Among the noteworthy gainers was Mitel (MITL), which rose 9.5% after it agreed to be acquired by an investor group led by affiliates of Searchlight Capital Partners. Also higher were Sanmina (SANM) and Heidrick & Struggles (HSII), which gained a respective 14.6% and 17% after reporting quarterly results. Among the notable losers was Epizyme (EPZM), which fell 15% after it said that U.S.-based enrollment of new patients into tazemetostat clinical trials has been temporarily put on hold by the FDA. Also lower were Freeport McMoRan (FCX) and Polaris Industries (PII), which fell a respective 14.5% and 9% after reporting quarterly results. INDEXES: The Dow fell 424.56, or 1.74%, to 24,024.13, the Nasdaq lost 121.25, or 1.70%, to 7,007.35, and the S&P 500 declined 35.73, or 1.34%, to 2,634.56.
previous post