Stock drop on mixed earnings; Caterpillar sinks
NEW YORK (AP) -- Mixed earnings reports pushed stocks lower in early trading on Wednesday.
Caterpillar slumped after the maker of mining and construction equipment said its third-quarter earnings plunged. The company cut its earnings forecast again. The stock dropped $5.252, or 5.9 percent, to $83.91.
Boeing jumped after raising its profit estimate for the full year as deliveries of commercial planes continue to accelerate. The plane maker's stock climbed $6.87, or 5.6 percent, to $129.35.
The Standard & Poor's 500 index fell back from a record after surging 6 percent over the previous two weeks. The index climbed as lawmakers inched toward a deal to end a 16-day partial government shutdown and avert a potential U.S. default. Investors also became more convinced that the Federal Reserve will refrain from easing back on its economic stimulus until possibly next year.
"We need to let a little bit of air out of the balloon here," said Alec Young, a global equity strategist at S&P Capital IQ. "We've seen a huge rally, so there's a bit of short-term-exhaustion."
The S&P 500 dropped 12 points, or 0.7 percent, to 1,742, putting the index on track for its first down day in six.
Energy stocks fell the most as the price of oil dropped to its lowest in almost four months. Oil slipped $1.95, or 2 percent, to $96.38 a barrel.
The Dow Jones industrial average fell 65 points, or 0.4 percent, to 15,402. The Nasdaq composite dropped 34 points, or 0.9 percent, to 3,895.
Many analysts and economists expect the Fed to refrain from easing its stimulus until next year to help the economy maintain its momentum after the government shutdown. The central bank is currently buying $85 billion in bonds every month to keep interest rates low. That stimulus program has underpinned a 4 1/2 year rally in stocks.
In government bond trading, the yield on the 10-year note fell to 2.49 percent from 2.51 percent late Tuesday.
In commodities, the price of gold fell $9.50, or 72 cents, to $1,333.20 an ounce.
Among other stocks making big moves:
-- Corning surged $1.65, or 10.7 percent, to $16.98 after the company announced a new tie-up with a Samsung Electronics subsidiary that will boost the glass maker's earnings immediately.
-- Safeway rose $1.92, or 5.8 percent, to $34.82 following a report from Reuters late yesterday that "a handful" of buyout firms, including Cerberus Capital Management, are exploring a deal for all, or part, of the supermarket chain.
-- Broadcom fell $1.95, or 7.2 percent, to $25.19. The communications chip maker reported adjusted results that exceeded Wall Street expectations, but the company's earnings forecast disappointed investors.