NEW YORK – The world on the cusp of a trade war has spooked investors, and few companies are feeling the fright more than Caterpillar.
Shares of the Deerfield, Illinois-based company, which is expected to post record profit this year and the best sales since 2014, have dropped for five straight days and are headed for the biggest monthly loss since 2016. The stock vied with Boeing Co. as the worst performer Tuesday on the Dow Jones Industrial Average.
The slide for Caterpillar, a bellwether for American industry, shows how trade frictions are upending assumptions for an improving global economy. Markets were rattled as China vowed to retaliate “forcefully” after President Donald Trump threatened to slap another $200-billion on imports from the Asian nation. Caterpillar said as recently as January, after boosting its 2018 forecast, that it didn’t expect the Trump administration’s policies to ignite a trade war.
“The market is selling the big trade-related plays, and the exporters in particular,” Matt Arnold, an analyst at Edward Jones & Co. in St. Louis, said in a telephone interview.
Caterpillar was the best-performing stock in the Dow Jones gauge over the past two calendar years. In May, the maker of iconic yellow bulldozers and excavators posted its biggest monthly gain since December.