Industrial sector-related ETFs stumbled Monday after Caterpillar (NYSE: CAT) announced its biggest earnings miss in a decade.
The Industrial Select Sector SPDR (NYSEArca: XLI) fell 1.3% and SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) dropped 1.3% on Monday.
Caterpillar revealed one of its worst quarterly earnings in years, undershooting Wall Street forecasts. The company said sales in its Asia/Pacific unit were 4% lower year-over-year “due to lower demand in China,” CNN reports. According to Bespoke Investment Group, it was Caterpillar’s worst earnings miss in 10 years.
Furthermore, the heavy equipment manufacturer warned that its earnings outlook for 2019 could be lower than Wall Street forecasts.
CAT shares plunged 9.0% on the announcement Monday. CAT makes up 3.9% of XLI and 3.7% of DIA.
Caterpillar chairman and CEO Jim Umpleby said in an earnings release the company was assuming “a modest sales increase” for the year, partly due to the “macroeconomic and geopolitical environment.”