Stocks drop on global growth worries; Caterpillar slumps

More evidence that global economic growth is slowing pushed the U.S. stock market down for a third straight day on Thursday.

The market fell sharply at the open, pushing stocks close to their lowest levels of the month, before rebounding during afternoon trading to close with only slight losses.

Caterpillar, a bellwether for industrial companies, fell sharply after cutting its sales outlook for this year and announcing that it would eliminate as many as 10,000 jobs to cut costs.

Also, the government reported that orders for long-lasting U.S. manufactured goods dropped in August. A key category that tracks business investment plans was especially weak.

“We’re looking for that good news and we’re not getting any,” said John Toohey, vice president of equity investments at USAA.

The Standard & Poor’s 500 index fell 6.52 points, or 0.3 percent, to 1,932.24. The Dow Jones industrial average lost 78.57 points, or 0.5 percent, to 16,201.32. The Nasdaq composite fell 18.27 points, or 0.4 percent, to 4,734.48.

The market has been in a funk for the past month as investors worry that slowing growth overseas, particularly in China, will hurt U.S. companies. A decision by the Federal Reserve to hold its benchmark interest rate close to zero last week also made investors uneasy.

Policymakers held the Fed’s benchmark interest rate despite an improving job market and a steady economy. Fed Chair Janet Yellen told reporters after the meeting that worries about China and emerging markets were a factor in their decision. Many economists expected that the central bank would instead focus on the health of the U.S. economy.

Yellen said in a speech late Thursday that she expects the Fed to begin raising interest rates by the end of the year. She also suggested that global economic weakness will not be significant enough to alter the central bank’s plan to raise its key short-term rate from zero by December. Her remarks came after the market had closed.

On Thursday, Caterpillar was the biggest decliner in the S&P 500.

The company slumped after cutting its 2015 revenue forecast by $1 billion to about $48 billion. Caterpillar also said sales would fall another 5 percent next year. The company said it may eliminate as many as 10,000 jobs between now and 2018. The maker of mining and construction equipment is suffering as a global slump in commodity prices hurts mining companies. The stock dropped $4.40, or 6.3 percent, to $65.80.

European markets also fell. Germany’s DAX dropped 1.9 percent, Britain’s FTSE 100 declined 1.2 percent and France’s CAC 40 lost 1.9 percent.

Automakers in Europe are still suffering in the wake of Volkswagen’s emissions scandal. While VW’s stock closed flat on the day, fellow German carmaker BMW fell 5.2 percent after a report said one of its models had failed a test in Europe. Fiat Chrysler fell 7.5 percent.

There was some strong earnings news from Nike after the close of trading.

The sportswear company reported earnings that surpassed analysts’ expectations as sales grew. Its stock climbed $8.61, or 7.5 percent, to $123.35 in after-hours trading.

In commodities trading, benchmark U.S. crude rose 43 cents to $44.91 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for many international oils imported by U.S. refineries, rose 42 cents to $48.17 a barrel.

Bond prices rose, pushing the yield on the 10-year Treasury note down to 2.12 percent from 2.15 percent a day earlier. The dollar slipped to 120.06 yen. The euro ticked higher to $1.1221.

The price of gold rose $22.30 to $1,153.80 an ounce. Silver climbed 34 cents to $15.13 an ounce and copper rose 0.7 cents to $2.30 a pound.

In other futures trading on the NYMEX:

— Wholesale gasoline fell 1.6 cents to close at $1.365 a gallon.

— Heating oil rose 1.8 cents to close at $1.524 a gallon.

— Natural gas rose 2.2 cents to close at $2.591 per 1,000 cubic feet.