officialstreetpreachers Subscribe
Published: April 24, 2018

2018 End of Year Predictions Cause Fear, Dow Jones Plunges over 550 Points

By Emily

The Dow plunges over 550 points, likely due to worry regarding rising interest rates and a conversation on a conference call from bellwether Caterpillar that claimed this year may end with slow growth.

The Dow Jones industrial average was 584 points lower as of 2:39 p.m. ET. The S&P 500 dropped 1.9%. The Nasdaq composite fell 2.2% as shares of Facebook, Amazon, Alphabet, and Netflix all dropped more than 4 percent.

The construction equipment maker, Caterpillar reported revenue and earnings that were better than expected which initially sent the stock higher, but later in the day, the companies shares fell 6.8%.

Caterpillar CFO Bradley Halverson said during a conference call that the company’s outlook assumed that the first quarter would be “the high watermark for the year.”

The construction equipment maker is a barometer for the state of the economy and the overall market. Caterpillar’s stock has a 0.81 correlation with the Dow over the last six months, according to Kensho. A correlation of 1 would mean the two move in lockstep with each other.

2018 has been a rocky year for the market. On Friday, February 2, 2018, the Dow dropped 666 points, a 2.6 % drop.

On Monday, February 5, 2018, the Dow Jones industrial average suffered its most significant one-day point drop in history, plunging 1,175 points.


Share this Article

Download the Mobile App.
Exit mobile version