Dow falls 2.4% on fears of rising interest rates, mixed earnings

The U.S. equities fell sharply in the previous session. Bigger companies managed to eke out modest gains, while smaller companies mostly fell.

Stocks nosedived Tuesday, with the Dow Jones industrial average sinking 600 points at session lows. This is partly due to the company's president Brad Halverson's statement, according to which the company's forecasts are that the first quarter will be the culmination of the year.

Stocks got off to a weak start as investors anxious that growing costs for raw materials along with rising interest rates would hold back profit growth for US companies.

Twitter Inc. (TWTR) posted first-quarter adjusted earnings of 16 cents a share, 4 cents ahead of estimates.

US stock indexes swung between gains and losses on Wednesday, as Boeing's jump after upbeat results and outlook was negated by declines in technology stocks and rising USA bond yields.

Stocks had tumbled on Tuesday after companies including Caterpillar, 3M and Sherwin-Williams said they seeing higher costs.

Caterpillar warned of weaker profits and 3M, like several other manufacturers reporting their quarterly results, said it was seeing higher costs for raw materials.

"Jeremy Klein, chief market strategist at FBN Securities, however said", I am not anxious about corporate earnings". For companies, it increases the cost to borrow capital.

The Dow clawed back some ground in the final minutes of trading and closed the day down 1.7 percent, or 424 points. CAT shares rose more than 4 percent in pre-market trading. The S&P 500 fell 1.9 percent, with consumer staples and technology sliding.

Traders work on the floor of the New York Stock Exchange (NYSE) on April 24, 2018 in New York City.

Stocks shot up at the end of 2017 and the start of 2018 as investors bet that the corporate tax overhaul would lead to bigger profits for American companies and greater economic growth. That optimism helped send stocks to record highs in January. Because this number measures the level of orders for products meant to last three years or more, it can be seen as a vote of confidence (or lack thereof) on business conditions and growth several years into the future.

BONDS: Investors may have also been anxious about rising interest rates, as they tend to slow down economic growth by making it more expensive for people and companies to borrow money.

The 10-year yield traded at 2.43 percent at the beginning of the year. The yield on the 10-year Treasury note stayed at 2.98 percent, matching Monday's close. Low interest rates have played an important role in the economic recovery of the last decade, and the yield on the 10-year note is a benchmark for many kinds of interest rates including mortgages. Higher rates, which are rising on expectations of stronger US economic growth and inflation, are also helping shore up the dollar.

The rising yields are a general indicator of the environment of rising rates created by the Federal Reserve's strategy to begin normalizing target interest rates for banks. Sky had previously accepted an offer from 21st Century Fox, and its shares gained 3.6 percent in London.

Comcast rose 2.7 percent after the largest USA cable company confirmed its $31 billion bid for Sky on the heels of its better-than-expected earnings report. Maybe we're in a "show-me" situation with the banks and direction might be clearer if the 10-year does hit 3 percent. The S&P 500 is now down 1.5 per cent year-to-date. Another market favorite, Amazon, shed 4.3 percent to $1,452.47. The price of the precious metal increased by 0.68% to 1,333 United States dollars per ounce.

Japan's benchmark Nikkei 225 index climbed 0.5 percent to 22,315.79 and South Korea's Kospi jumped 1.3 percent to 2,481.70 after Samsung reported better than expected earnings. The euro rose to $1.2244 from $1.2205. The Nasdaq increased 34 points, or 0.5 percent, to 7,162. The Shanghai Composite shed 0.3 percent to 3,119.31.

METALS: Gold rose 0.7 percent to $1,333 an ounce.

The largest percentage gainer on the TSX was Mitel Networks Corp, which rose 9.6 per cent.

The S&P 500 was slightly up and the Nasdaq was slightly down by the closing bell. The Nasdaq gave up 121 points, or 1.7 percent, to 7,007.

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