Earnings, oil sink markets
NEW YORK - A four-day streak of record closes ended for the Standard & Poor's 500 index Wednesday after Caterpillar reported weak earnings and falling oil prices hurt energy stocks.
The plunge in bellwether Caterpillar's third-quarter profit discouraged investors and stalled a two-week surge in the stock market.
The S&P 500 dropped 8.29 points, or 0.47 percent, to 1,746.38, ending its longest streak of record closes since mid-May.
Energy stocks fell the most of the 10 industry sectors in the S&P 500. Oil slipped $1.42, or 1.4 percent, to $97.80 a barrel, on higher U.S. supplies of crude and weak demand for fuel.
Along with Caterpillar - whose stock dropped $5.41, or 6.1 percent, to $83.76 - Broadcom also disappointed Wall Street with its third-quarter earnings. The communications-chip maker fell 78 cents, or 2.9 percent, to $26.36. It reported adjusted results that exceeded Wall Street expectations, but the company's earnings forecast was weak.
The Dow Jones industrial average fell 54.33 points, or 0.35 percent, to 15,413.33 The Nasdaq composite dropped 22.49 points, or 0.57 percent, to 3,907.07.
While some earnings disappointed investors Wednesday, most are reporting profits better than expected. About 60 percent of the companies in the S&P 500 that have reported third-quarter earnings have beaten analysts' forecasts, according to data from S&P Capital IQ.
S&P 500 companies are expected to report earnings growth of 3.5 percent for the July-to-September quarter over the same period a year earlier. Revenue is expected to rise by 3.9 percent.
In government bond trading, the yield on the 10-year Treasury note fell to 2.50 percent from 2.51 percent late Tuesday.
The yield, which is used to set interest rates on many kinds of loans including mortgages, is the lowest it has been since mid-July. It has fallen half a point since reaching a high for the year of 3 percent Sept. 5. Investors have bought Treasurys, pushing down their yield, as the outlook for economic growth has weakened since the government shutdown.
The slowdown has an upside, though. Many analysts and economists expect the Fed to continue its economic stimulus until next year to help the economy maintain its momentum after the government shutdown. The central bank is buying $85 billion in bonds every month to keep interest rates low. That stimulus program has underpinned a 41/2 year rally in stocks.
In commodities, the price of gold fell $8.60, or 0.6 percent, to $1,334 an ounce.