Caterpillar's Slog Brings the Dow Down to Earth

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has bounced back from this morning's steep losses, down a negligible seven points as of 2:20 p.m. EDT. Stocks are split between risers and fallers, but few of the Dow's members are posting big moves on this sleepy day on Wall Street. Let's check out the top stories around the Dow.

Caterpillar's (NYSE: CAT  ) still feeling the fallout of the poor earnings it reported earlier this week. The manufacturing stock is 2% so far to lead the Dow lower. Low prices for many raw materials continue to weigh on the mining sector, where Caterpillar is one of the industry leaders. That business saw disappointment weigh on the company's overall earnings, which fell 43% for the quarter.

It's a messy situation for Caterpillar looking forward. China, formerly the company's hope as a major growth area for the future, is struggling through an economic slowdown that will continue to stifle infrastructure spending. Caterpillar's leadership is still bullish on China's prospects, but there's little doubt that the country's economy has fallen sharply off its pace from just a few years ago. China's still growing faster than most major economies, but the days of double-digit growth are done.

Home Depot's (NYSE: HD  ) also having a bad day, with the retailer's stock down 2.2%. This home improvement giant is tied heavily to the rebounding housing industry, which has helped propel shares up more than 26% year to date. However, when that industry takes a hit, Home Depot can often fall -- and today's drop is a prime example. Two homebuilders reported lower-than-expected orders in a pair of weak earnings reports today, weighing on Home Depot's stock as some investors have decided to take their profits and dump their shares.

Profit-taking's also a culprit, considering how well this stock has done in 2013: Its year-to-date gains are about 8 percentage points higher than the S&P 500's (SNPINDEX: ^GSPC  ) . Mortgage rates have swung higher lately, and the trend will likely impact Home Depot's shares in the near future. However, so long as the housing market continues its steady climb from the depths of the 2008 crisis, Home Depot should have a clear path to success.

Finally, Chevron's (NYSE: CVX  ) among the Dow's best today, with shares gaining about 0.7%. The oil giant recently inked around $845 million worth of contracts for energy development in the North Sea. The North Sea has become a hot spot for energy development in recent years, and Chevron's particularly interested in the Rosebank oil and gas field where it discovered oil back in 2004. The company won't make a final decision on whether to fully develop the plot until next year, however.

Dow stocks like Chevron and Home Depot are primed to pay off in the long term for patient investors. That's a good thing, because the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

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Related Tickers

9/29/2016 4:35 PM
^DJI $18143.45 Down -195.79 -1.07%
^GSPC $2151.13 Down -20.24 -0.93%
S&P 500 INDEX CAPS Rating: No stars
CAT $87.47 Up +0.88 +1.02%
Caterpillar CAPS Rating: ***
CVX $101.27 Down -0.88 -0.86%
Chevron CAPS Rating: ****
HD $127.93 Down -0.34 -0.27%
Home Depot CAPS Rating: ****