NEW YORK (AP) -- Stocks opened broadly lower after two major U.S. companies dropped after saying that weakness in China's economy was weighing on their results.
Caterpillar, a bellwether for industrial companies, has been warning investors that higher costs related to tariffs would hurt its bottom line. The weak results weighed down the entire sector.
Nvidia led the tech sector lower as it cut its forecasts, also blaming weakness in China, which is the world's second-largest economy
China is facing its worst economic slowdown since the global financial crisis and the impact is being felt widely among the many U.S. companies that rely on China for sales, especially industrial and technology companies. The slowdown is being exacerbated by continuing trade tensions between Washington and Beijing.
In July-September, China's economy expanded at 6.5 percent, the slowest pace since the financial crisis.
KEEPING SCORE: The S&P 500 index lost 32 points, or 1.2 percent to 2,632 as of 10 a.m. Eastern time. The Dow Jones Industrial Average dropped 364 points, or 1.5 percent, to 24,372. The Nasdaq composite fell 116 points, or 1.6 percent, to 7,048.
CHINA BLUES: Caterpillar and NVIDIA plunged as a slowdown in growth in the world's second largest economy, China, hurt their results. Apple recently warned that iPhone sales are slipping in China.
The slowdown is adding to Caterpillar's problems, and its fourth-quarter profit fell short of Wall Street expectations. Caterpillar fell 7.8 percent to $126.12. The stock is down 18 percent over the last 12 months, compared with a 7 percent drop in the S&P 500.
Deere & Co., a key competitor, fell 2.4 percent to $157.69.
Chipmaker NVIDIA lowered its revenue forecast, citing a slowdown in China. CEO Jensen Huang called the quarter "extraordinary, unusually turbulent, and disappointing." The stock fell 15.2 percent to $135.86.
TRADE TALKS LOOM: Talks aimed at resolving the impasse over Chinese technology policy and other issues are due to resume in Washington this week, led by the U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He. Analysts say there might be moves to trim China's massive trade surplus with the U.S. that could stave off further hikes in punitive tariffs imposed by both sides. However, they expect gaps to remain on key problems such as China's blueprint for state-led development of leading technologies.
ENERGY: U.S. crude oil fell 3 percent to $52.07 per barrel in New York. Brent crude, used to price international oils, fell 2.4 percent to $60.13 per barrel in London.
OVERSEAS: The British FTSE lost 0.1 percent. Germany's DAX fell 0.5 percent and France's CAC 40 fell 0.78 percent. Japan's Nikkei 225 stock index fell 0.6 percent. Hong Kong's Hang Seng was flat, as was South Korea's Kospi.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell 2.73 percent.