US stocks drop on global growth worries; Caterpillar slumps

U.S. stocks are closing lower as traders worry again about slowing global growth.

Heavy equipment maker Caterpillar plunged 6 percent Thursday after lowering its revenue forecast and announcing a restructuring.

Joy Global, a maker of mining equipment, slipped 1 percent. Falling prices for copper and other basic materials have hurt those companies.

The Dow Jones industrial average lost 78 points, or 0.5 percent, to 16,201. It had been down 263 points earlier.

The Standard & Poor's 500 index fell six points, or 0.3 percent, to 1,932. The Nasdaq composite declined 18 points, or 0.4 percent, to 4,734.

Bond prices rose. The yield on the benchmark 10-year Treasury note fell to 2.13 percent.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

U.S. stocks dropped in afternoon trading Thursday on further evidence that global growth is slowing. Industrial stocks lost ground after Caterpillar cut its revenue forecast, blaming a downturn in the mining industry. Health care stocks also fell sharply.

KEEPING SCORE: The Standard & Poor's 500 index fell four points, or 0.2 percent, to 1,934 as of 3:25 p.m. Eastern time. The Dow Jones industrial average lost 63 points, or 0.4 percent, to 16,216. The Nasdaq composite fell 14 points, or 0.3 percent, to 4,738.

FED WATCH: Investors will closely follow a speech on inflation and monetary policy later Thursday by U.S. Federal Reserve Chair Janet Yellen. Markets are looking for clues on the timing of the Fed's first interest-rate hike in nearly a decade after it held off raising rates earlier this month. The Fed has rate-setting meetings in October and December.

THE QUOTE: The Fed kept its benchmark interest rate on hold at close to zero, despite an improving job market and a steady economy. That decision unsettled some investors, because it suggests that the central bank is not confident about the outlook for growth.

"The fear factor was introduced by the Fed last week when they didn't raise rates," said Peter Cardillo, chief market economist at Rockwell Capital. "We're in a very jittery market that's not likely to reverse course until we get some clear indications from the Fed."

CHALLENGING TIMES: Caterpillar fell $4.33, or 6.2 percent, to $65.88 after cutting its 2015 revenue forecast by $1 billion to about $48 billion, and saying sales would fall another 5 percent next year. The company also 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.

GLOBAL RATE CUTS: While the Fed is considering raising interest rates, other central banks are lowering them. That's another sign that growth outside the U.S. remains weak. Norway's central bank cut its key interest rate to a record low of 0.75 percent and hinted that it could reduce the rate further. Taiwan's central bank also lowered its benchmark rate to 1.75 percent, the first cut since 2009, according to reports.

EUROPE'S DAY: Germany's DAX fell 1.9 percent, Britain's FTSE 100 dropped 1.2 percent and France's CAC 40 lost 1.9 percent.

AUTO SHARES: Automakers fell in the wake of Volkswagen's emissions scandal. After early gains, Volkswagen shares were down 1 percent. Fellow German carmaker BMW fell 5.2 percent after a report said one of its models had failed a test in Europe. France's Renault was down 1.8 percent.

ENERGY: 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.

BONDS AND CURRENCIES: 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.

METALS: 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 cents a pound.