Stocks fall on grim Caterpillar outlook
Stocks were tugged lower Wednesday by a grim earnings report from the world's largest construction equipment company. That makes two consecutive days of losses for stocks, the first time that's happened all month.
A gloomy outlook from Caterpillar, the world's largest construction equipment company, tugged the stock market lower Wednesday.Skip to next paragraph
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The meager drop gave the stock market two consecutive days of losses, the first time that's happened all month.
Caterpillar's earnings fell 43 percent in the second quarter as China's economy slowed and commodity prices sank. The company also warned of slowing revenue and profit, and its stock dropped $2.08, or 2 percent, to $83.44.
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Slight losses spread across a wide variety of companies, with nine of 10 industry groups in the Standard & Poor's 500 index ending lower.
The holdouts were technology companies, which got a lift from Apple's surgingstock. Despite reporting lower quarterly earnings Tuesday, the maker of tablets, smartphones and computers still managed to beat analysts' estimates, thanks to rising shipments of iPhones. Apple jumped $21.52, or 5 percent, to $440.51.
The Dow Jones industrial average fell 25.50 points, or 0.2 percent, at 15,542.24.
The Standard & Poor's 500 index fell 6.45 points, or 0.4 percent, to 1,685.94. The technology-heavy Nasdaq composite index edged up 0.33 of a point, or less than 0.1 percent, to 3,579.60.
Although far from a blockbuster earnings season, the larger trend for corporate profits looks good. Analysts forecast that second-quarter earnings for companies in the S&P 500 increased 4.2 percent over the same period last year, according to S&P Capital IQ. At the start of the month, they were looking for earnings to rise 2.8 percent. More than six out of every 10 companies have surpassed Wall Street's profit targets.
"Yes, they're beating expectations, but expectations are so low," said Brad McMillan, chief investment officer at Commonwealth Financial. The overall number masks some worrisome trends, he said.