Dow Drops 402 Points After Weak Caterpillar Results

Uber surged almost 19%
By Newser Editors and Wire Services
Posted Aug 2, 2022 3:40 PM CDT
Dow Drops 402 Points After Weak Caterpillar Results
Stocks fell on Wall Street Tuesday, Aug. 2 amid threats from Beijing over Pelosi's Taiwan visit.   (AP Photo/Julia Nikhinson, File)

Stocks closed lower Tuesday as Wall Street’s modest August retreat continued another day. Stocks wavered over the day, with investors unsure whether the market’s strong run in July was the start of a turnaround or a temporary blip, the AP reports. The S&P 500 fell 27.44, or 0.7%, to 4,091.19 after drifting between a loss of 0.9% and a gain of 0.5% through the day. The Dow Jones Industrial Average dropped even more, losing 402.23, or 1.2%, to 32,396.17, largely because of a tumble for equipment maker Caterpillar. The Nasdaq composite held up better but still slipped 20.22, or 0.2%, to 12,348.76.

Treasury yields climbed through the day as concerns calmed a bit that the first visit by a US Speaker of the House to Taiwan in 25 years could spark conflict between the world’s two largest economies. Uber surged 18.9% after it reported surprisingly strong second-quarter revenue. One discouraging signal for investors came Tuesday from a profit report by Caterpillar, seen by some on Wall Street as an economic bellwether. Its stock tumbled 5.9% after the Illinois-based maker of backhoes and bulldozers reported weaker revenue for the latest quarter than analysts expected.

Some weak recent data on the economy raised speculation that the peak for inflation and for the Federal Reserve’s aggressive hikes to interest rates may be approaching or has already passed. The weak data, though, also shows the risk of a recession as rate hikes already pushed through by the Fed put the brake on the economy. A report on Tuesday showed that US employers posted fewer job openings in June, and the number was weaker than economists expected. On Friday, a report will show how many workers US employers added last month, and economists expect it to show the unemployment rate remained very low even as hiring slowed. (More stock market stories.)

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