NEW YORK (AFX) - Wall Street pulled back Friday as a lackluster profit
report and forecast from Caterpillar Inc. curtailed investor enthusiasm a day
after the Dow Jones industrial average closed above 12,000 for the first time.
Caterpillar, one of the 30 blue chip stocks that comprise the Dow, unnerved
investors who have betting the slowing economy will pull off a soft landing
rather than tip into recession.
In midmorning trading, the Dow fell 45.86, or 0.38 percent, to 11,965.87.
Broader stock indicators also declined. The Standard & Poor's 500 index was
down 3.03, or 0.22 percent, at 1,363.93, and the Nasdaq composite index fell
9.75, or 0.42 percent, to 2,331.19, despite a strong showing by Google Inc.
Bonds showed little movement, with the yield on the benchmark 10-year
Treasury note flat at 4.79 percent from late Thursday. The dollar was mixed
against other major currencies, while gold prices fell.
Light, sweet crude was down 17 cents at $58.33 a barrel in on the New York
Mercantile Exchange.
Caterpillar fell $8.36, or 12.1 percent, to $60.66 despite a 15 percent
increase in its third-quarter profit. Though the maker of heavy equipment sold
more construction and mining equipment, it warned increased operating costs and
weaker-than-expected sales would cut into its full-year profits.
Google, the Internet search company, jumped $28.11, or 6.6 percent, to
$454.17 after its profit nearly doubled and revenue surged 70 percent during the
third quarter, which is traditionally slower as people generally spend less time
in front of a computer during the summer months.
Investors heard from other Dow components Friday to cap off a busy week of
earnings reports.
3M Co. rose $1.54, or 2.2 percent, to $77.94 after posting a 6.4 percent
increase in its third-quarter profit amid renewed strength in its business of
making films for LCD television and computer screens.
Drug maker Merck & Co. rose 66 cents to $45.15 after reporting
stronger-than-expected earnings and revenue, though earnings were down 34
percent and sales were flat.
Declining issues outnumbered advancers by about 7 to 6 on the New York Stock
Exchange, where volume came to 327.1 million shares.
The Russell 2000 index of smaller companies was down 6.11, or 0.80 percent,
to 761.28.
Overseas, Japan's Nikkei stock average closed up 0.61 percent. In afternoon
trading, Britain's FTSE 100 was down 0.09 percent, Germany's DAX index was up
0.25 percent, and France's CAC-40 was up 0.10 percent.
Copyright 2006 Associated Press. All rights reserved. This material may not be
published, broadcast, rewritten, or redistributed.
|