clear
Thursday September 3rd, 2015 3:14PM

Stock drop on Caterpillar earnings, falling oil

By The Associated Press
NEW YORK - A four-day streak of record closes ended for the Standard & Poor's 500 index Wednesday after Caterpillar reported weak earnings and falling oil prices hurt energy stocks.

Caterpillar, which makes mining and construction equipment, is considered an important barometer of the global economy. The plunge in Caterpillar's third-quarter profit discouraged investors and stalled a two-week surge in the stock market. Energy stocks dropped as the price of oil fell to its lowest in almost four months.

The S&P 500 had surged 6 percent over the previous two weeks. The index climbed as lawmakers inched toward a deal to end a 16-day partial government shutdown and avert a potential U.S. default. Investors also became more convinced that the Federal Reserve will refrain from easing back on its economic stimulus until possibly next year.

"We need to let a little bit of air out of the balloon here," said Alec Young, a global equity strategist at S&P Capital IQ. "We've seen a huge rally, so there's a bit of short-term-exhaustion."

The S&P 500 dropped 8.29 points, or 0.5 percent, to 1,746.38, ending its longest streak of record closes since mid-May.

Energy stocks fell the most of the 10 industry sectors in the S&P 500. Oil slipped $1.42, or 1.4 percent, to $97.80 a barrel, on higher U.S. supplies of crude and weak demand for fuel.

Along with weaker earnings, Caterpillar issued a lower profit forecast. Its stock dropped $5.41, or 6.1 percent, to $83.76.

Broadcom was another company that disappointed Wall Street with its third-quarter earnings. The communications chip maker fell 78 cents or 2.9 percent, to $26.36, reported adjusted results that exceeded Wall Street expectations, but the company's earnings forecast was weak.

It wasn't all bad news from corporate America.

Boeing raised its profit estimate for the full year because deliveries of commercial planes continue to accelerate. The plane maker's stock climbed $6.54, or 5.3 percent, to $129.02.

The Dow Jones industrial average fell 54.33 points, or 0.4 percent, to 15,413.33 The Nasdaq composite dropped 22.49 points, or 0.6 percent, to 3,907.07.

While some earnings disappointed investors on Wednesday, most are reporting profits that are better than expected. About sixty percent of the companies in the S&P 500 that have reported third-quarter earnings have beaten analysts' forecasts, according to data from S&P Capital IQ.

"Obviously we've had one casualty today with Caterpillar but, so far, most companies have beaten market expectations," said Peter Cardillo, chief market economist at Rockwell Global Capital.

S&P 500 companies are expected to report earnings growth of 3.5 percent for the July-to-September quarter over the same period a year earlier. Revenue is expected to rise by 3.9 percent.

In government bond trading, the yield on the 10-year Treasury note fell to 2.50 percent from 2.51 percent late Tuesday.

The yield, which is used to set interest rates on many kinds of loans including mortgages, is the lowest it's been since mid-July. It has fallen 0.5 percent since reaching a high for the year of 3 percent on Sept. 5. Investors have bought Treasurys, pushing down their yield, as the outlook for economic growth has weakened since the government shutdown.

The slowdown has an upside, though. Many analysts and economists expect the Fed to continue its economic stimulus until next year to help the economy maintain its momentum after the government shutdown. The central bank is currently buying $85 billion in bonds every month to keep interest rates low. That stimulus program has underpinned a 4 1/2 year rally in stocks.

In commodities, the price of gold fell $8.60, or 0.6 percent, to $1,334 an ounce.

Among other stocks making big moves:

- Corning surged $2.17, or 14.1 percent, to $17.52 after the company announced a new tie-up with a Samsung Electronics subsidiary that will boost the glass maker's earnings immediately.

- Safeway rose $2.68, or 8.1 percent, to $35.58 following a report from Reuters late yesterday that "a handful" of buyout firms, including Cerberus Capital Management, are exploring a deal for all, or part, of the supermarket chain.
© Copyright 2015 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 1 year ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 1 year ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 1 year ago )
U.S. News
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 1 year ago )
Amtrak to suspend some Crescent service in Jan., Feb.
Amtrak service will shut down in parts of the Southeast for several days in January and February for rail maintenance by Norfolk Southern Railway.
9:00AM ( 1 year ago )
Lung cancer scans urged for some smokers, not all
Certain current or former heavy smokers should start getting yearly scans for lung cancer to cut their risk of death from the nation's top cancer killer, government advisers said Monday - even as they stressed that the tests aren't for everyone.
7:26AM ( 1 year ago )
Business News
Sex offender held in Hall County for failing to register
A 47-year-old man was booked into the Hall County Jail Tuesday, being held without bond for allegedly failing to register as a sex offender, his second such arrest.
6:09PM ( 1 year ago )
Pharmacy robberies may involve same suspect
Oakwood Police Tuesday afternoon released details in a pharmacy robbery they're investigating, similar to one that happened in the Hall County Tuesday morning.
5:46PM ( 1 year ago )
Victim critical following apartment fire
A 41-year-old woman was in critical but stable condition Tuesday after being rescued from an apartment fire in Forsyth County late Monday afternoon.
3:16PM ( 1 year ago )
Local/State News
Settlement reached for one firefighter injured in 2014 training accident
One of the firefighters injured in a training accident in July 2014 has reached a settlement with Sutphen Corporation, the company who manufactured the ladder truck that malfunctioned in the accident.
2:52PM ( 22 minutes ago )
Ga. students perform better on SAT, national average drops
The Georgia Department of Education (DOE) reported Thursday that Georgia students’ SAT scores for 2015 increased five points, even as the national average dropped seven points.
By AccessWDUN Staff
2:05PM ( 1 hour ago )
Robbery suspects arrested following intensive search
Hall County authorities said an intensive search Tuesday led to two suspects in an August 23 armed robbery in Clermont.
1:07PM ( 2 hours ago )
Winder motorist killed in wreck involving deer
Authorities have released the name of the man who died Thursday morning in a traffic accident involving a deer on Old Flowery Branch Road in Hall County.
11:42AM ( 3 hours ago )
Gainesville gang member arrested with $95K worth of meth
A Gainesville man is behind bars after authorities confiscated $95,200 worth of methamphetamine and a loaded semi-automatic pistol during a traffic stop.
11:02AM ( 4 hours ago )