Dow Ignores Tech as Caterpillar, Verizon Move in Opposite Directions

The Dow Jones Industrials (DJINDICES: ^DJI  ) have plenty of technology stocks among their ranks. But the one that mattered Thursday morning isn't among them -- at least not for now -- and so the Dow didn't benefit from the tech surge. In fact, as of 11 a.m. EDT, the Dow was down nine points, as conflicting quarterly reports from Caterpillar (NYSE: CAT  ) and Verizon (NYSE: VZ  ) showed the deep divide between stronger and weaker sectors of the economy and their earnings-growth prospects.

Source: Motley Fool.

On the positive side, Caterpillar led the the Dow Jones gainers with a nearly 3% advance. The heavy-equipment maker saw first-quarter profit rise by 5% from the year-ago quarter, and Caterpillar also raised its forecast for full-year 2014 profit by $0.25 per share to $6.10, which is about 7% higher than investors had expected before the announcement. Flat revenue also beat expectations. Of even more importance is the improving sentiment for the construction side of the business, in both the U.S. and China, as more builders are purchasing equipment. Still, one struggle for Caterpillar continues to come from the mining-equipment segment, in which low commodities prices still have mining-company customers reluctant to make large capital expenditures at a time when cost-cutting measures are paramount to sustain margins. Yet if construction and infrastructure activity can pick up the slack, Caterpillar has plenty of room to recover from its relative underperformance in recent years.

Source: Verizon.

Verizon led the Dow's decliners with a nearly 2% drop. Revenue jumped 5%, and earnings rose as a consequence of the completion of its takeover of its Verizon Wireless segment. Verizon also managed to add 539,000 new monthly subscribers as it worked hard to avoid the line of fire in a battle over pricing that has largely involved infighting among its main competitors. However, those subscriber-growth numbers were weaker than what Verizon's telecom archrival and fellow Dow component announced earlier this week, which was the first time Verizon has lost the lead in almost four years. Nevertheless, strength in Verizon's FiOS high-speed Internet service was an encouraging sign that the company is working hard to go beyond wireless devices and provide whole-home services for its customers. As the industry becomes increasingly competitive, it'll be more important for Verizon to establish and build on customer relationships to milk the most profit from each subscriber.

Earnings season is far from over, but stories like Caterpillar's and Verizon's already give much different pictures of what is happening with the economy. It'll be interesting to see as earnings season winds down how the Dow reacts once day-to-day news returns to topics with broader impact on the stock market as a whole.

3 stocks poised to be multi-baggers
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have found multi-bagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

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

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.

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: 2928119, ~/Articles/ArticleHandler.aspx, 9/5/2015 8:35:37 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...

Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

Today's Market

updated 11 hours ago Sponsored by:
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASD 4,683.92 -49.58 -1.05%

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

9/4/2015 4:30 PM
^DJI $16102.38 Down -272.38 -1.66%
CAT $73.10 Down -1.35 -1.81%
Caterpillar, Inc. CAPS Rating: ***
VZ $44.82 Down -0.90 -1.97%
Verizon Communicat… CAPS Rating: ****