Wall Street stocks retreat as industrials tumble

Wall Street stocks retreat as industrials tumble

NEW YORK: Wall Street stocks retreated on Wednesday (Jul 17), with industrial companies especially weak as a Federal Reserve report described US growth as "modest."

Shares of Dow members Caterpillar, United Technology and Honeywell International fell more than two per cent on the dimming outlook of the sector's prospects amid slowing global growth.

The Fed, meanwhile, reported that worries about trade continue to weigh on sentiment even as the US economy keeps chugging along with steady job creation and tame inflation.

The report comes ahead of a policy meeting later this month at which the Fed is widely expected to cut interest rates.

The Dow Jones Industrial Average finished down 115.78 points (0.42 per cent) at 27,219.85.

The broad-based S&P 500 shed 19.62 points (0.65 per cent) to 2,984.42, while the tech-rich Nasdaq Composite Index shed 37.59 points (0.46 per cent) to 8,185.21.

After hitting records last week, analysts have cautioned that stocks could be challenged to push higher, in part because of lacklustre corporate earnings are expected this quarter.

Freight rail company CSX plunged 10.3 per cent after it cut its full-year revenue forecast. Executives said activity has declined gradually since the beginning of the year.

Rival freight rail companies Union Pacific and Norfolk Southern tumbled 6.4 per cent and 7.4 per cent.

Another industrial company, auto parts supplier Lear dropped 2.1 per cent as it cut its full-year financial projections, saying "general macroeconomic and industry factors" will weigh on results the rest of the year.

Facebook slipped one per cent as the social media's proposed global digital coin Libra faced a second straight day of scrutiny on Capitol Hill.

Lawmakers have raised concerns over Facebook's record on privacy and data protection, while critics have also questioned its effect on the global financial system.

Bank of America gained 0.9 per cent as it reported a 10 per cent jump in second-quarter profits to US$7.1 billion. Executives cautioned that Federal Reserve interest rate cuts would weigh on profits in the second half of the year.

Source: AFP/de