Caterpillar and United Technologies Bring the Dow Back to Life

The Dow Jones Industrial Average is starting the week on the right foot with help from Caterpillar and United Technologies.

Jan 27, 2014 at 3:30PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

This week is already starting on a better foot than last, with the Dow Jones Industrial Average (DJINDICES:^DJI) trading a scant 0.15% higher at 3:30 p.m. EST. Of course, it's not without drama after the market started off higher, sank at midday, and moved back into the green, so there's definitely not any conviction despite some very strong performers today.

Caterpillar (NYSE:CAT) continues a trend of strong earnings reports that do little to pull the market as a whole higher. Fourth-quarter revenue fell 12% to $14.4 billion, but the heavy equipment maker still pulled out a 44% jump in earnings per share to $1.54.  

That's better than the $13.4 billion in revenue and $1.27 per share in profit analysts expected, but also displays weakness in demand for mining equipment that was hot in 2012. While investors like the report today, and have pushed shares 5.7% higher, this is still a highly cyclical business and revenue could fall again in 2014 if China's economy continues to slow. Management expects flat revenue this year, so keep an eye on how things play out for this volatile company.  

United Technologies (NYSE:UTX) is up 2.1% after reports surfaced that the company will sell or spin off its Sikorsky helicopter unit. The business accounts for 10% of revenue and 6% of EBIT so it's definitely a big part of United Technologies. But this is also a rumor from an unnamed source, so the likelihood of of an actual sale is probably small. I'd chalk this up as noise in trading unless management makes any clear indication that it's looking to unload Sikorsky.  

What to read into earnings reports
The market's reactions to earnings this month has been strange because most companies, like Caterpillar today, are beating expectations soundly. The problem is that after 30% gains last year, investors are looking for any flaw they can to sell stocks -- thus sending the market lower.

The bottom line is that if earnings continue to be strong and the economy grows, the stock market is still on solid footing. Find reasons to sell if you want, but when companies reporting earnings are moving higher I think that's good news for the market long-term.

Look past the market's volatility
The market can be very volatile on a day-to-day basis, which is why buying and holding stocks for long periods of time is the best way to beat the market. Our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers