Stocks opened deep in negative territory, with the early weakness attributed to a pullback in the Chinese stock market and poor earnings reports from Dow components Caterpillar (CAT) and 3M (MMM). The market broke through its opening prices and picked up downside momentum during the first hour of trading, leading the Dow to be down over 500 points at its low for the session. Meanwhile, the Nasdaq hit its lowest level in six months and the S&P is in the midst of its worst performing month since 2010. The market began to slowly pare its losses and in the final hour made an attempt at closing higher, though that effort fell short. Still, the average closed well off their worst levels.
ECONOMIC EVENTS: In the U.S., the Richmond Fed's manufacturing index dove 14 points to 15 in October after rising to a record high of 29 in September. In Federal Reserve news, Fed Board minutes showed that most banks supported the September 26 rate hike at the September 17 meeting.
COMPANY NEWS: McDonald's (MCD) was the leader among the five Dow members that reported earnings, rising 6% after its earnings and revenues topped consensus forecasts. Caterpillar was the worst performer, sliding 7.5% after its Q3 results and FY18 guidance. 3M, which lowered its FY18 adjusted earnings view due to foreign currency impacts, fell about 4%. United Technologies (UTX), which raised its fiscal year earnings outlook, gained nearly 3% and Verizon (VZ), which posted better than expected earnings and revenue, rose 4%.
Meanwhile, Tesla (TSLA) shares closed almost 13% higher after the car maker announced that it will report Q3 results after the close tomorrow. After the news, Morgan Stanley analyst Adam Jonas said that the company's "surprise" pull-forward of its earnings report to tomorrow evening is "more likely a positive sign than an adverse sign." Additionally, noted short-seller Citron Research reversed its opinion on the stock, saying it is long Tesla shares heading into the company's quarterly earnings report.
MAJOR MOVERS: Among the noteworthy gainers was Omeros (OMER), which rose 4% after it said that OMS721 has received orphan drug designation from the FDA for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy. Also higher were Cadence Design (CDNS) and PulteGroup (PHM), which gained a respective 15% and 7% after reporting quarterly results.
Among the notable losers were Moelis (MC) and Centene (CNC), which fell 17% and 5%, respectively, after reporting quarterly results.
INDEXES: The Dow fell 125.98, or 0.50%, to 25,191.43, the Nasdaq lost 31.09, or 0.42%, to 7,437.54, and the S&P 500 declined 15.19, or 0.55%, to 2,740.69.
Caterpillar
-9.66 (-7.51%)
McDonald's
+10.64 (+6.39%)
3M
-8.89 (-4.41%)
UTX
+
Verizon
+2.27 (+4.13%)
Tesla
+33.27 (+12.75%)
Omeros
+0.61 (+3.95%)
Cadence Design
+6.19 (+15.24%)
PulteGroup
+1.52 (+7.28%)
Moelis
-8.5 (-16.78%)
Centene
-6.935 (-4.91%)