Caterpillar news slows market

Stocks close mixed after Caterpillar issues weak earnings report and forecast

Wall Street ended a record-setting week narrowly mixed Friday, with the Dow Jones industrials falling to close inches above 12,000 after a lackluster profit report and forecast from Caterpillar Inc. prompted many investors to retreat. The Dow was up for the week, but broader market indicators were mixed.

Caterpillar, one of the 30 blue chip stocks that comprise the Dow, unnerved investors who have bet that the slowing economy would pull off a soft landing rather than tip into recession.

“Caterpillar must have taken about 60 to 70 points off the Dow,” said Stephen Carl, head of equity trading at The Williams Capital Group.

It was optimism about the economy and rising hopes for strong third-quarter earnings that had lifted the Dow into uncharted territory this week. The blue chip index, reaching its first 1,000-point milestone in 7 1/2 years, traded past 12,000 for the first time Wednesday and had its first close above that mark on Thursday.

The Dow closed down 9.36, or 0.08 percent, at 12,002.37.

Broader stock indicators showed modest gains after spending much of the session with losses. The Standard & Poor’s 500 index was up 1.64, or 0.12 percent, at 1,368.60, and the Nasdaq composite index rose 1.36, or 0.06 percent, to 2,342.30 following a strong showing by Google Inc.

The Dow rose 0.35 percent for the week, while the S&P gained 0.22 percent and the Nasdaq fell 0.64 percent. The Dow had shown triple-digit point gains in each of the previous three weeks. Despite the overall gains in the market, the S&P stands about 10.4 percent below its high close of 1,527.46 and the Nasdaq is even further off, about 54 percent. All three indexes had peaked in early 2000 before plunging in response to the dot-com bust, recession and the aftermath of the 2001 terror attacks.

Bonds showed little movement Friday, with the yield on the benchmark 10-year Treasury flat with 4.79 percent from late Thursday. The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude settled down $1.68 at $56.82 a barrel at the New York Mercantile Exchange. Oil fell to new lows for the year Friday amid skepticism about whether OPEC would fully implement a greater-than-expected production cut.

The disappointing earnings forecasts punctured some of the market’s optimism about the economy; data indicated that the economy is gently moderating have contributed to a memorable first three weeks of October on Wall Street. Earlier this month, the Dow became the first of the market’s big indexes to move past record levels set back in 2000, and it cemented that recovery with this week’s move past 12,000. The Dow traded as high as 12,049.51, and set a new closing record of 12,011.73.

Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where consolidated volume came to 2.57 billion shares, compared with 2.65 billion Thursday.

The Russell 2000 index of smaller companies was down 5.26, or 0.69 percent, to 762.13.

Overseas, Japan’s Nikkei stock average closed up 0.61 percent. Britain’s FTSE 100 closed down 0.01 percent, Germany’s DAX index was up 0.41 percent, and France’s CAC-40 was up 0.29 percent.