NEW YORK (AP) â€” U.S. stocks slumped on Thursday morning on further evidence that global growth is slowing. Industrial stocks led the declines after Caterpillar cuts its revenue forecast, blaming a downturn in the mining industry.
KEEPING SCORE: The Standard & Poor's 500 index fell 27 points, or 1.4 percent, to 1,910 as of 11:13 a.m. Eastern time. The Dow Jones industrial average dropped 251 points, or 1.5 percent, to 16,031. The Nasdaq composite fell 77 points, or 1.7 percent, to 4,674.
FED WATCH: Investors will closely follow a speech on inflation & monetary policy after Thursday by U.S. Federal Reserve Chair Janet Yellen. Markets are looking for clues on the timing of the Fed's first interest-rate hike in nearly a decade after it held off raising rates earlier this month. The Fed has rate-setting meetings in October & December.
p>THE QUOTE: The Fed kept its benchmark interest rate on hold at close to zero, despite an improving job market & a steady economy. That decision unsettled some investors, because it suggests that the central bank is not confident approximately the outlook for growth.
"The fear factor was introduced by the Fed last week when they didn't raise rates," said Peter Cardillo, chief market economist at Rockwell Capital. "We're in a very jittery market that's not likely to reverse course until we obtain some clear indications from the Fed."
CHALLENGING TIMES: Caterpillar fell $4.80, or 6.7 percent, to $65.41 after cutting its 2015 revenue forecast by $1 billion to approximately $48 billion, & saying sales would fall a further 5 percent next year. The company moreover said it may cut as many as 10,000 jobs between now & 2018. The maker of mining & construction equipment is suffering as a global slump in commodity prices is hurting mining companies.
GLOBAL CUTS: While the Fed is considering raising interest rates, other central banks are lowering interest rates. Norway's central bank cut its key interest rate to 0.75 percent, the lowest level it's ever been, & hinted that it could reduce the rate further. Taiwan's central bank moreover lowered its benchmark rate to 1.75 percent, the first cut since 2009, according to reports.
EUROPE'S DAY: Germany's DAX fell 2.3 percent, Britain's FTSE 100 dropped 1.1 percent & France's CAC 40 1.1 percent.
AUTO SHARES: Automakers fell in the wake of Volkswagen's emissions scandal. After early gains, Volkswagen shares were down 1 percent. Fellow German carmaker BMW fell 5.2 percent after a report said one of its models had failed a test in Europe. France's Renault was down 2.8 percent.
ENERGY: Benchmark U.S. crude was down 2 cents at $44.47 a barrel on the New York Mercantile Exchange.
BONDS AND CURRENCIES: Bond prices rose, pushing the yield on the 10-year note down to 2.08 percent from 2.15 percent a day earlier. The dollar slipped to 119.57 yen. The euro ticked higher to $1.1241.
Source: “Associated Press”