Monday morning, the Dow Jones Industrials (DJINDICES:^DJI) responded to news on the international front once more, but for many investors the source was probably a surprise. Without market-moving news from Russia and Ukraine, economic data from China took center stage, with an 18% plunge in exports from the emerging-market giant once again raising fears of slowing economic growth as the nation's trade balance turned from surplus to deficit. As of 11 a.m. EDT, the Dow was down 108 points, with Boeing (NYSE:BA) posting the worst decline and Caterpillar (NYSE:CAT) also falling because of its connection to China.
Boeing was off more than 2.5% as the aircraft maker had to deal with several problems. After the company said Friday afternoon that hairline fractures in some of its 787 Dreamliner aircraft being built could cause minor production delays, a Japan Airlines 787 flying from Tokyo to San Francisco had to make an emergency landing in Hawaii over the weekend when an oil-pressure drop triggered warnings. Combined with the disappearance and presumed crash of a Malaysia Airlines 777, Boeing is starting to see investor fatigue from the repeated news items hitting its newer aircraft models. Until the problems are resolved, Boeing might finally see the substantial correction in its stock that it has avoided for more than a year.
Meanwhile, Caterpillar fell about 0.7% following the news from China. With exports falling, China caused many key commodities markets, including crude oil and base metals such as copper, to drop in response. Copper hit a 2014 low, sending Southern Copper (NYSE:SCCO) to a 4% loss and Freeport-McMoRan Copper & Gold (NYSE:FCX) down more than 3%. That in turn will hurt Caterpillar, whose mining-equipment business needs a full-blown recovery in commodities markets to continue. Unfortunately, with China driving so much of the world's economic growth lately, bad news from that economy ripples across the globe; Caterpillar's recovery is fragile enough that a longer-term disruption in China's economy would cause substantial problems throughout the industrial sector.