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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Stocks are ending the week on a weak note today, with several major names falling deep into the red. The Dow Jones Industrial Average (DJINDICES: ^DJI ) has suffered a worsening slide all day, and as of 2:25 p.m. EDT the blue-chip index has lost more than 110 points. Stocks across the market are weighing down on the Dow, but Caterpillar (NYSE: CAT ) in particular has sunk the index. Let's catch up on what you need to know.
Caterpillar's crisis continues
Caterpillar's shares have fallen 2.8 past quarters, and the trend's not letting up. Today Caterpillar announced that global dealer sales fell again over the past three months, with machine sales falling 10% over that time frame. That's an even worse drop than the 9% fall in machine sales Caterpillar suffered in the prior quarter.
Unfortunately, the rest of Caterpillar's businesses aren't helping to pick up the slack. The company reported that its power systems sales fell 6% for the quarter as well, which won't help this stock's sluggish year-to-date performance. As has been the case recently, sales took the hardest hit in the Asia-Pacific region, where machinery sales fell a drastic 30%. In fact, out of all regions, only North America posted a sales gain -- a paltry 1%.
That won't be enough to turn around Caterpillar's fortunes after the company saw total revenue fall by 19% year over year through 2013's first six months. The company has other problems besides China, although the second-leading economy's retooling and slowdown have undoubtedly harmed the company's fortunes. Caterpillar will need to see a boost from numerous areas across the globe -- whether that's Europe, the Middle East, or Latin America, all of which saw sales declines in the most recent quarter -- if it wants to bounce back.
Microsoft (NASDAQ: MSFT ) isn't having a much better day, with shares down 2.1%. Company executives, including outgoing CEO Steve Ballmer, launched a lengthy presentation today pitching their vision of the company as a unified tech giant across devices, consumer tech products, business enterprises, and software.
That's been a sticky proposition for Microsoft recently: While the firm's business software continues to perform well, its forays into the hardware market have fizzled. The company's planning to release new versions of its Surface tablet Monday, but with sales of the device impressing nobody so far, it's hard to see how the announcement will inspire investors. Some on Wall Street have pushed for Microsoft to stick to its strongest niches, such as software products like Microsoft Office. The server and tools division, the company's second-largest unit by revenue, has also performed well recently, growing sales 9% in the most recent fiscal year.
Still, change is coming to Microsoft, whether investors like it or not, with Ballmer's retirement. Keep a close eye on Microsoft as it heads into an uncertain future.
Can Microsoft Keep Pace?
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