Why These Stocks Are Tanking

The Dow Jones Industrial Average (INDEX: ^DJI  ) may not be repeating its historic 23% drop today, but the index is rapidly moving lower today. As of 12:30 p.m. EDT the index is at 13,384, down 164 points, or 1.22%. Only one Dow component is higher for the day: Bank of America, which is also the best-performing stock for the year in the Dow 30, up more than 70%.

Needless to say, it's not hard to find a few Dow stocks moving lower today, but the most important question is why they're dropping.

So what's the story?
The easy answer is that these companies are down because of lackluster earnings. General Electric (NYSE: GE  ) and McDonald's (NYSE: MCD  ) are seeing their shares drop by 3.11% and 3.8%, respectively, after missing analyst estimates. General Electric met analyst expectations of $0.36 per share earnings but missed on revenue, only bringing in $36.35 billion where Wall Street wanted to see $36.95 billion.

McDonald's, on the other hand, saw income fall to $1.43 per share, while analysts were expecting $1.47 per share. While McDonald's saw same-store sales rise by 1.9%, it was the first time since 2003 in which that number grew less than 2%. The company is facing strong year-over-year comparisons, which can be blamed for part of the slowdown. But regardless, investors were not happy, and the company's share price has taken a hit.

Finally, Caterpillar (NYSE: CAT  ) reported a 6% increase in worldwide equipment sales, but that increase slowed dramatically in all markets. Asia-Pacific sales posted the best numbers, rising 14% in September, but that's down from a 27% increase in August and a 28% rise in July. In North America, sales grew 16% in September, versus 24% in August and 25% in July. Europe, Africa, the Middle East, and Latin America were all either flat or down for the month. Shares of the company are moving lower by 3.01%.

Foolishly investing
Many investors believe Caterpillar is one of the best barometers of the world economy's performance. It has a strong brand and operates all around the world. A good sign that an economy is running on all cylinders is when construction sites are sprouting left and right, creating demand for Caterpillar's products. With that said, what do the pros think about caterpillar today? Find out for yourself in this report, which will even tell you whether you should buy Caterpillar today. Just click here to claim your copy and a year of free updates as news hits.

Matt Thalman has no positions in the stocks mentioned above. The Motley Fool owns shares of General Electric Company and McDonald's. Motley Fool newsletter services recommend McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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