NEW YORK (AP) -- U.S. stocks are falling Thursday morning as interest rates resume their upward climb and several industrial companies post disappointing third-quarter results. Interest rates started rising a day ago after the Federal Reserve released minutes showing that a minority of its leaders think interest rates will need to keep rising to a level that slightly restricts economic growth. Slower economic growth would affect stocks because it means smaller corporate profits and less spending by consumers.
Aircraft maker Textron and tool maker Snap-On both slumped after their quarterly reports, and other big manufacturers also traded lower. Technology companies and drugmakers skidded.
KEEPING SCORE: The S&P 500 index shed 17 points, or 0.6 percent, to 2,791 as of 10 a.m. Eastern time. The Dow Jones Industrial Average lost 178 points, or 0.7 percent, to 25,528. The Nasdaq composite sank 59 points, or 0.8 percent, to 7,583. The Russell 2000 index of smaller-company stocks declined 9 points, or 0.6 percent, to 1,579.
WHAT DOES THE FED SAY: According to minutes from the latest Federal Reserve meeting, several Fed policymakers think its benchmark interest rate will eventually have to rise to a level that is "moderately restrictive" to economic growth in order to make sure inflation doesn't get out of control. The Fed has been gradually raising interest rates since the end of 2015 after keeping them near zero for seven years in the wake of the global financial crisis. Low rates contributed to the U.S.' economic recovery and to big gains for stocks over the last decade, as low rates made bonds relatively unappealing.
Bond prices dropped. The yield on the 10-year Treasury note rose to 3.19 percent from 3.15 percent. The yield on the 10-year note spiked to seven-year highs last week.
INDUSTRIAL WOES: Aircraft maker Textron slid 8.1 percent to $59.55 after its profit and sales fell far short of analyst forecasts. The company said its aerospace and defense business and its industrial business both weakened. Tool and diagnostic equipment company Snap-On lost 7.7 percent to $154.64 after it posted lower revenue than analysts expected, and United Rentals fell 6.5 percent to $130.07 after its report.
Elsewhere, Caterpillar fell 2.6 percent to $137.69. Industrial and basic materials companies have taken bigger losses than any other part of the market over the last month, and one reason is that investors feel they are especially vulnerable in the ongoing trade dispute between the U.S. and China. Higher tariffs on metals can hurt the sales of companies like Alcoa and also drive up costs for companies that use those metals to make other kinds of machinery.
ALUMINUM SHINING: Aluminum producer Alcoa rose 8.2 percent to $39.72 after it topped Wall Street projections in the third quarter. The company also said it will buy back $200 million in stock. Alcoa's stock has slumped over the last six months as the U.S. announced tariffs on imported steel and aluminum, which is reducing the company's profits because it has several facilities in Canada.
CHINA'S CURRENCY FALLS: China's politically sensitive yuan fell to a 22-month low against the dollar after the U.S. Treasury declined to label Beijing a currency manipulator. The yuan fell to 6.9411 per dollar, the closest it has come to breaking the symbolic level of seven to the dollar since December 2016, but recovered slightly in the afternoon.
OVERSEAS: Germany's DAX dipped 0.3 percent and the FTSE 100 in Britain also fell 0.1 percent. The CAC 40 in France added 0.1 percent.
Japan's Nikkei 225 index sank 0.8 percent and the Kospi in South Korea lost 0.9 percent. Hong Kong's Hang Seng index was little changed.
ENERGY: The price of U.S. crude oil lost 1 percent to $69.14 per barrel in New York, its lowest in a month. Brent crude, the international standard, lost 1.2 percent to $79.07 per barrel in London.
CURRENCIES: The dollar inched up to 112.52 yen from 112.49 yen. The euro fell to $1.1490 from $1.1507.