The Joplin Globe, Joplin, MO

Business

July 24, 2013

Caterpillar tugs Dow lower; Apple jumps

NEW YORK — Apple led an early rise in technology stocks after it beat analysts’ estimates for quarterly earnings and revenue. But a warning of slowing sales from Caterpillar, the world’s largest construction equipment company, helped tug broad-market indexes down.

Apple reported late Tuesday that it shipped more iPhones in the latest quarter. The company also announced plans to introduce new products in the fall. Apple jumped $20.60, or 5 percent, to $439.65.

Outside of technology stocks, the broader market edged lower. The Dow Jones industrial average was down 38 points, or 0.2 percent, to 15,528, shortly after 10 a.m.

The Standard & Poor’s 500 index was down two points, 0.q percent, at 1,689. The technology-heavy Nasdaq composite index was up eight points, or 0.2 percent, at 3,587.

Technology companies led half of the industry groups in the S&P 500 up. Telecoms led the other half down.

Caterpillar said its earnings fell 43 percent in the second quarter, well below Wall Street’s estimates, as China’s economy slowed and commodity prices sank. The company also cut its profit and revenue outlook for the year. Caterpillar sank $2.16, or 3 percent, to $83.36.

Among other stocks making big moves, AT&T fell 82 cents, or 2.3 percent, to $34.98. AT&T’s profits fell in the latest quarter as costs surged. The company’s coffers were drained by smartphone sales, which it subsidizes in the hope of making money back over the life of two-year contracts.

Despite some high-profile earnings misses, the overall picture for corporate profits has looked good for the second quarter. More than six out of every 10 companies have turned in earnings that beat Wall Street’s estimates, according to S&P Capital IQ.

Analysts forecast that second-quarter earnings for companies in the S&P 500 increased 3.9 percent over the same period last year. But they expect revenue to shrink 0.7 percent.

In Europe, a broad gauge of economic activity reached the highest level since January 2012, sending stock markets in Germany and France higher. Financial information company Markit said Wednesday that its monthly purchasing managers’ index for the countries that use the euro currency increased for the fourth month running.

France’s CAC 40 rose 0.7 percent and Germany’s DAX rose 0.3 percent.

The report out of Europe pushed prices for U.S. government bonds down and their yields up. The yield on the 10-year Treasury note rose to 2.58 percent from 2.51 percent late Tuesday.  

Signs of economic strength usually lead traders to sell Treasurys, considered one of the safest places in the world to park cash.

 

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