Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Caterpillar Fell Short on the Dow's 6th Record Day

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

The string of record closes for the Dow Jones Industrials (DJINDICES: ^DJI  ) continued today, but it's hard to think of today's three-point gain as anything more than a technicality. Broader market benchmarks all fell on the day, as tensions in Washington started to escalate once more as House Republicans announced their outline to reduce the budget deficit dramatically over the next three years. With a competing plan expected from the Senate soon, wrangling over the federal budget could continue for the foreseeable future, introducing yet another set of uncertainties for investors.

Caterpillar (NYSE: CAT  ) suffered the biggest loss among Dow stocks, falling more than 1.5% as fears about recent weakness in industrial activity in China continue to challenge the company's long-term growth thesis. Nevertheless, while the Chinese economy may have to deal with decelerating growth, its growth rates will remain well above those of the developed world, and that should help give Caterpillar superior prospects compared to more domestically focused peers.

General Electric (NYSE: GE  ) also fell, losing almost 1% as an analyst at Nomura Securities said yesterday that the recent gains in GE's stock already reflected most of its positive future potential. Coming on the heels of the company's own warning in its annual report that political crises like the budget debate could lead to a reduced willingness among U.S. corporations to spend money on capital expenditures, investors need to consider whether GE's roughly 30% rise since last June has pushed the stock up too far too quickly.

Outside the Dow, Sears Hometown and Outlet Stores (NASDAQ: SHOS  ) plunged nearly 13% after announcing that same-store sales fell 0.5% in its most recent quarter after adjusting for an extra week in this year's quarter. With the spinoff suffering from many of the same problems that parent Sears Holdings (NASDAQ: SHLD  ) continues to face, the advantage that Sears Hometown has is that its small size makes it more nimble and able to adjust strategies to take advantage of changing conditions. If its move to scale back on consumer electronics succeeds, Sears Hometown may rebound sharply from today's losses in the long run.

Caterpillar is more than just a global leader in construction machinery. It's also a benchmark for the entire global economy. Find out whether Caterpillar is pointing to a stronger recovery by reading our premium research report on the stock, which includes expert analysis of the company's growth initiatives and future prospects. Just click here to access it now.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2309146, ~/Articles/ArticleHandler.aspx, 10/1/2016 6:30:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 5:01 PM
^DJI $18308.15 Up +164.70 +0.91%
CAT $88.77 Up +1.30 +1.49%
Caterpillar CAPS Rating: ***
GE $29.62 Up +0.09 +0.30%
General Electric CAPS Rating: ****
SHLD $11.46 Up +0.46 +4.18%
Sears Holdings CAPS Rating: *
SHOS $4.93 Down -0.04 -0.80%
Sears Hometown and… CAPS Rating: **