Shares in the US heavy equipment manufacturer Caterpillar sank after the company downgraded its full-year earnings forecast and announced plans to cut jobs.
Declines in shares of Caterpillar, last down 5.9% on the New York Stock Exchange, helped propel the Dow Jones industrial average lower according to BusinessDesk.
Caterpillar says it may axe as many as 10,000 jobs through 2018.
The company will offer a voluntary retirement enhancement program for qualifying employees, which will be completed by the end of 2015.
“The Caterpillar news is not helping matters, it’s emblematic of a weaker global economy,” Joseph Quinlan, chief market strategist for US Trust, in New York, told Reuters.
Shares of Chevron and those of Exxon Mobil bucked the trend on the New York stock exchange, last trading 1.4%, and 1.1% higher respectively.
“I think we’re going to see the automakers weighing on the market much more in the coming weeks,” Barthelemy Debray, a fund manager at Old Mutual Global Investors in London, told Bloomberg. “We’ve heard nothing from auto suppliers and auto manufacturers, I think they are in crisis mode. I think this is just the beginning.”
