Here’s Why Capital Goods Stocks Are Crashing Now

The reason: everyone is scared that the US political leadership may not have it in them to hammer out a deal to avert a debt default by a fast approaching August 2nd deadline. Also, European sovereign debt worries have sent the market reeling in economic jitters as concerns are starting to emerge over the accuracy of the standards applied by EU regulators in the latest round of banking stress tests.

Here’s a look at the five most active capital goods stocks in trading today, all deep in the red:

Caterpillar Inc. (NYSE:CAT) -2.12%, Deere & Company (NYSE:DE) -2.79%, The Boeing Company (NYSE:BA) – 2.76%, Cummins Inc. (NYSE:CMI) -2.08%, and Northrop Grumman Corp. (NYSE:NOC) -0.60%.