Dow plunges after weak earnings from Caterpillar, Microsoft; drop in durable-good orders

MarketsAssociated Press

The Dow Jones industrial average has dropped nearly 400 points in late morning trading after disappointing earnings reports and a surprise drop in orders for long-lasting goods.

The Dow was off 357 points, or 2 percent, to 17,321 as of 10:42 a.m. Eastern time Tuesday and at one point slid as much as 390 points. Caterpillar and Microsoft, which are members of the Dow, reported weaker results, and their shares fell sharply.

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Orders for long-lasting manufactured goods fell 3.4 percent in December following a 2.1 percent decline in November, the Commerce Department reported Tuesday. The decline was led by a 55.5 percent plunge in the volatile category of commercial aircraft.