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Daily Stock Market Update — Tuesday, Oct. 23

Stock Market Update Wall Street Wake-Up Call

Stocks clawed back much of the ground they lost in an early plunge but still ended lower, continuing a dismal month for the stock market.

Major indexes pulled back sharply in early trading Tuesday, wiping nearly 550 points off the Dow Jones Industrial Average.

Traders blamed worries over slowing growth in China and costs related to President Donald Trump’s trade policies.

Caterpillar lost 7.6 percent after saying taxes on imported steel were driving up costs.

Big gains by McDonald’s and Verizon helped soften the losses elsewhere.

The S&P 500 fell 15 points, or 0.6 percent, to 2,740. The index is 6.5 percent below the peak it reached a month ago.

The Dow lost 125 points, or 0.5 percent, to 25,191. The Nasdaq slipped 31 points, or 0.4 percent, to 7,437.

Decliners outnumbered gainers on the New York Stock Exchange by a ratio of nearly 8 to 1.

Bond prices rose, sending the yield on the 10-year Treasury note down to 3.14 percent from 3.19 percent late Monday.

The Chicago Board Options Exchange’s volatility index, known as the VIX, or fear index, jumped 14 percent to its highest level in two weeks.

Hong Kong’s Hang Seng index sank 3.1 percent and European markets traded lower.

Markets have been rattled in recent weeks by increased worries over the impact that rising interest rates, inflation and the escalating trade dispute between the U.S. and China may have on Corporate America.

Trump has imposed tariffs on about $250 billion in Chinese imports, and Beijing has retaliated by targeting $110 billion in American products. Trump has threatened to tax another $267 billion in Chinese products — a move that would cover virtually everything China ships to America.

The two countries are locked in a dispute over U.S. allegations that China steals U.S. technology and forces U.S. companies to share trade secrets in exchange for access to the Chinese market.

Technology and health care companies also took heavy losses Tuesday. Nvidia gave back 4.2 percent to $221.63, while Centene fell 8.2 percent to $129.67.

Truck maker Paccar tumbled 6.9 percent to $56.35, while engine manufacturer Cummins slid 3.4 percent to $135.17.

Traders bid up shares in McDonald’s after the fast-food chain reported third-quarter results that topped analysts’ forecasts. The stock gained 6.2 percent to $176.91.

Close to 17 percent of companies on the broad S&P 500 index have reported earnings for the third quarter, and over half of them did better than expected.

“They’re coming in ahead of expectations, generally, but the degree to which they’re beating expectations is less than what it has been in previous quarters,” Delwiche said. “That’s why there’s some concern there.”

Tesla was among the few winners Tuesday. The stock vaulted 9.2 percent to $285.13 after Citron Research, a company that for years had bet against the stock, reversed its position and put out a note saying it would be a long-term investor in the electric car and solar panel company.

Benchmark U.S. crude fell 4.4 percent to $66.33 per barrel in New York. Brent crude, used to price international oils, dropped 4.1 percent to $76.52 per barrel in London.

The decline in oil price weighed on energy stocks. Halliburton dropped 3.3 percent to $35.21.

The dollar weakened to 112.19 yen from 112.82 yen on Monday. The euro rose to $1.1486 from $1.1466.

In Europe, the focus was on Italy’s dispute with the European Union over its plan to ramp up public spending. The plan expands its targeted deficit to 2.4 percent of GDP next year, three times more than promised by the previous government.

The European Union has rejected Italy’s budget, a first for an EU member. It’s worried that the plans would prevent Italy from lowering its debt, which is second only to Greece among its members. International credit rating agency Moody’s has downgraded Italy’s credit rating.

Germany’s DAX slid 2.2 percent and France’s CAC 40 fell 1.7 percent lower. Britain’s FTSE 100 lost 1.2 percent.

In Asia, Japan’s Nikkei 225 index gave up 2.7 percent and the Kospi in South Korea tumbled 2.6 percent. Australia’s S&P-ASX 200 dipped 1.1 percent.

© The Associated Press. All rights reserved.

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