Cat income exceeds expectations


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Originally Posted Online: Jan. 28, 2013, 9:18 am
Last Updated: Jan. 28, 2013, 10:21 am
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U.S. stocks fell Monday morning, backing off a rally that had pushed the Standard & Poor's 500 index above 1,500 for the first time since December 2007. The modest decline occurred despite of encouraging signs about the manufacturing sector, a key driver of economic growth.

The government said before trading began that orders for long-lasting goods rose in December by 4.6 percent, helped by a 10 percent gain in orders for new aircraft.

Heavy equipment maker Caterpillar said separately that its fourth-quarter net income exceeded analysts' expectations, after adjusting for the cost of a soured deal to buy a Chinese maker of roofing supports for mines. Caterpillar said it took a big charge in the quarter because the Chinese company had misrepresented its finances.

Caterpillar Inc. said it expects growth in China to improve without regaining the levels seen in 2010 or 2011. The stock was the biggest gainer in the Dow Jones industrial average, rising $1.21, or 1.3 percent, to $96.79 as of 10:15 a.m. Eastern time.

Stocks opened mixed after Caterpillar's announcement and the factory orders data, but turned negative in the first half-hour of trading. Declining stocks outnumbered rising stocks by more than two to one on the New York Stock Exchange.

The Dow fell 25 points to 13,870. The S&P 500 dropped six to 1,497. The Nasdaq composite average declined three to 3,146.

Among companies in the S&P 500 that reported earnings Monday, Biogen Idec Inc. said its fourth-quarter net income slipped nearly 3 percent because of a tax charge and higher expenses. Still, the biotech drug maker was one of the top gainers in the S&P 500, rising $4.40, or 3 percent, to $150.60.

Roper Industries Inc., which makes medical and industrial equipment, said its fourth-quarter net income rose 18 percent. But the company issued mixed guidance for the current quarter and full year 2013. It rose 9 cents to $118.92.

Strong corporate earnings have pushed stocks higher in the past two weeks after several calm, relatively news-free weeks. On Friday, the S&P 500 closed above 1,500 for the first time since December 2007, the official start of the worst economic downturn since the 1930s.

In addition to strong earnings, traders have been encouraged by signals that housing market is improving steadily and hiring is picking up, albeit slowly.

There will plenty of fresh data to drive trading this week, including retail sales, economic growth and the government's report on hiring and employment in January, which is due out Friday. More than one-fifth of the companies in the S&P 500 will report fourth-quarter earnings this week.

The yield in the benchmark 10-year Treasury note rose to 1.98 percent from 1.95 percent late Friday, reflecting lower demand for ultra-safe investments. After Monday's factory orders report, the yield rose briefly above 2 percent for the first time since April. A bond's yield rises as demand for it decreases.














 



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  Today is Tuesday, July 22, the 203rd day of 2014. There are 162 days left in the year.

1864 -- 150 years ago: Everybody is invited to go on a moonlight excursion next Monday evening on the steamer New Boston. The trip will be from Davenport to Muscatine and back.
1889 -- 125 years ago: The mayor and bridge committee let a contract to the Clinton Bridge company for a $1,125 iron bridge across Sears canal near Milan.
1914 -- 100 years ago: Injunction proceedings to compel the Central Association to keep a baseball team in Rock Island for the remainder of the season were contemplated by some of the Rock Island fans, but they decided to defer action.
1939 -- 75 years ago: The first of the new and more powerful diesel engines built for the Rock Island Lines for the proposed Chicago-Denver run, passed thru the Tri-Cities this morning.
1964 -- 50 years ago: The Rock Island Rescue Mission is negotiating for the purchase of the Prince Hall Masonic Home located at 37th Avenue and 5th Street, Rock Island.
1989 -- 25 years ago: Quad Cities Container Terminal is being lauded as a giant business boon that will save several days and hundreds of dollars on each goods shipment to the coasts. The Quad Cities Container Terminal is the final piece of the puzzle that opens up increase access to world markets, Robert Goldstein said.








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