US stocks broadly lower as tech sector struggles
U.S. stocks fell Monday as tech shares posted their third consecutive down day and Facebook fell into bear market territory.
The Dow Jones Industrial Average fell 144.23 points, or 0.57%, to 25,306.83. The S&P 500 dropped 16.22 points, or 0.58%, to 2,802.60. The tech-heavy Nasdaq Composite was down 107.42 points, closing 1.39% lower at 7,630.
Early in the session a record second-quarter profit from heavy equipment maker Caterpillar buoyed large-capitalization indexes. But that effect wore off as all major indexes turned negative.
The Deerfield, Illinois, manufacturer, which also hiked its full-year outlook and raised its dividend, beat Wall Street's expectations, which had been tempered by worries about the effect of tariffs on the company's exports and also rising input costs.
But Caterpillar's success wasn't enough to lift the Dow, the S&P 500 or the Nasdaq, down more than 1% as tech stocks struggled. Shares of Google parent Alphabet were down more than 1%; Facebook shares tumbled more than 2%, falling into bear market territory during the session. Since July 25, the shares have fallen more than 20%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 44782 | -128.65 | -0.29% |
| SP500 | S&P 500 | 6047.15 | +14.77 | +0.24% |
| I:COMP | NASDAQ COMPOSITE INDEX | 19403.947849 | +185.78 | +0.97% |
Meanwhile, the second-quarter earnings parade continues this week with reports from four more Dow components: Pfizer, P&G and Apple on Tuesday; and DowDuPont on Thursday. In addition, investors will also get results from 134 companies in the S&P 500, or just over one quarter of the benchmark index.
Slightly more than half the companies in the S&P 500 have reported April-June earnings, and so far the results are well ahead of expectations.
In Europe, Britain's FTSE 100 was trading modestly higher, while Germany's DAX and France's CAC40 were lower. Asian bourses closed mostly lower.
On Friday, the S&P 500 managed to post its fourth-straight weekly advance, as strong earnings from a number of firms helped offset an end-of-week slide in the technology sector.
Investors parsed a mixed batch of data and earnings results over the course of the week that broadly suggested the U.S. economy remains strong, even as certain industries have shown signs of weakening. Data Friday showed the U.S. economy grew 4.1% from April through June -- the fastest pace in nearly four years, though lower than the expectation of economists surveyed by The Wall Street Journal.
Tech titans like Alphabet and Amazon.com reported earnings that blew past analysts' estimates, sending their shares higher.
Yet disappointing earnings from a number of other companies put pressure on the tech sector, sparking wild swings. Facebook logged the biggest one-day loss in market capitalization ever Thursday after warning its growth was slowing, while Intel and Twitter tumbled after their earnings failed to meet investors' expectations.
Twitter slumped $8.82, or 21%, to $34.12 on Friday, logging its biggest one-day decline since February 2014.