Energy, tech gains boost indexes
A big earnings miss from Caterpillar on Friday wasn’t enough to derail a rally that pushed the stock market up 2 percent for the week.
Caterpillar Inc. fell nearly 6 percent after the heavy equipment maker earned less than analysts were expecting last quarter, partly because of the earthquake and tsunami disaster in Japan. The company is seen as a bellwether for the global economy because it sells construction and mining machinery all over the world.
The disappointing results from Caterpillar and a continuing deadlock over raising the U.S. borrowing limit capped the stock market’s gains. Overseas markets rose after European leaders reached a deal late Thursday aimed at containing the region’s debt crisis.
The Dow Jones industrial average fell 43.25 points. Even with the decline, the Dow gained 1.6 percent for the week. It has finished three out of the last four weeks higher than where it started.
Energy, technology and consumer discretionary companies were the only three of the 10 industries tracked by the S&P 500 that rose. That was still enough to push the broad market index higher.
Consumer discretionary companies include retailers like Amazon Inc. and restaurant chains like McDonald’s Corp. McDonald’s rose 2 percent, the most of any stock in the Dow average, after its income and revenue came in higher than analysts were expecting due to strong sales in Europe.
Technology stocks rose broadly after Advanced Micro Devices Inc. reported strong second-quarter earnings and said its new computer graphics chip was selling well.
Traders kept close watch on negotiations in Washington over a deal to raise the nation’s debt ceiling ahead of an Aug. 2 deadline. The impasse has overshadowed an agreement in Europe Thursday to give Greece a second financial lifeline and broaden the powers of a regional bailout fund.
Concerns are spreading that the U.S. debt ceiling won’t be raised before the deadline.”
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