Investors were in a rotten mood Tuesday.
Seemingly good results from Dow components Caterpillar, Coca-Cola and United Technologies didn't please Wall Street. The Dow closed down 425 points, or 1.7%, after opening with a 130-point gain. At its worst point of the day, the Dow was down more than 600 points.
The Dow has fallen for the past five straight days — its longest losing streak in more than a year — and has given up its gains for the year.
Why the nearly 650-point swing in the Dow in a matter of hours? Once investors took a closer look at the results, they focused on the negatives.
Caterpillar, for example, warned that profit margins would probably not get any higher this year than they are now.
And Coke investors were disappointed that lower prices may have helped drive sales -- even though Diet Coke finally returned to growth. Shares of Caterpillar plunged 6% while Coke's stock lost 2%.
Verizon was one of the few companies that posted strong results Tuesday that didn't seem to have any caveats -- and it was rewarded for it. Shares of Verizon rose 2%.
But other earnings reports were downright gloomy. 3M, another Dow component, lowered its outlook for the year. That sent its stock plunging 7%. Insurance company Travelers, also in the Dow, fell 3% after its earnings missed forecasts.
All this negativity dragged down other old-school, classic industrial Dow companies too. Boeing and DowDuPont both fell about 3%.
And tech investors were disappointed by increased expenses at Google parent Alphabet.
Related: Why everyone is stressing about the 10-year Treasury
Even though Alphabet posted solid gains in earnings and revenue that easily topped Wall Street's estimates, the stock fell 5% — and that helped drag down the S&P 500, Nasdaq and tech titans Apple, Amazon, Microsoft and Facebook.
It didn't help that the yield on the 10-year US Treasury note rose above 3% for the first time in more than four years Tuesday morning.
If this benchmark bond rate keeps climbing, it may make it more expensive to borrow money for mortgages and auto loans and could eat into profits at big US companies — especially since the Federal Reserve is expected to keep raising short-term rates.
Still, one expert said investors may be overreacting to the moves in the bond market.
"I don't know that there is any magic to the 3.0% level other than it is a nice round number," said Jeff Mills, co-chief investment strategist for PNC Financial Services Group. "There is no rule that says rising rates are bad for the stock market."
Mills added that since 1928, stocks have actually done a little bit better when rates have gone up. The market has gained about 11% on average during years that rates have gone up and 9% in years of falling rates.
But jittery investors don't seem to care about historical market facts right now. They are selling first and asking questions later.
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