Despite a positive start, stocks fell off after opening and the Dow Jones Industrial Average (DJINDICES:^DJI) finished down 0.16%, or 26 points. It was the blue chips' fifth straight session with little movement, as investors seem to be unsure if the market deserves to go further into record territory with earnings continuing to roll in. June new home sales topped expectations, coming at 497,000 versus estimates of 483,000, but Wall Street seemed to be unimpressed by President Obama's remarks on the economy. In his address, Obama touted mostly recycled ideas such as investing in infrastructure and raising the minimum wage that have gained little traction in the divided Congress.
Two industrial powerhouses on the Dow delivered earnings today. First, Caterpillar (NYSE:CAT) shares finished down 2.4% after missing estimates as many had expected. The slowdown in Chinese construction has hurt demand for materials and thus mining equipment, a key component of Caterpillar's business. The world's largest maker of earth-moving equipment said profits fell 43% as EPS came in at $1.45, down from $2.54 a year ago, and worse than estimates at $1.69. Revenue dropped 15.8% to $14.6 billion, below expectations of $15.1 billion. Management promised cost-cutting to cope with the decrease in demand, and cut its full-year EPS outlook from $7 to $6.50.
Boeing (NYSE:BA), the other Dow stock to report today, fared better, but still finished down 0.8% after hitting a new all-time high earlier in the day. The aircraft-maker actually beat estimates, but high expectations seemed to have been baked in as the stock has soared, up 40% this year, and investors are still worried about problems with the 787 as well as slow growth in its defense segment. Profits increased 13% to $1.41 per share, topping estimates of $1.30, while revenue grew 9% to $21.8 billion, better than the consensus at $20.8 billion. The company also bumped up its full-year revenue projection to $83 billion to $86 billion.
Outside the Dow, Facebook (NASDAQ: FB) shares skyrocketed 16% after hours as the social-media champ delighted investors with improved ad sales. Revenue surged 53% to $1.81 billion, a faster clip than the previous quarter and 41% of ad sales came from mobile, a key figure for Facebook as usage transfers from PCs to mobile devices. Adjusted earnings per share came in at $0.19, better than the experts' view at $0.14, while revenue of $1.81 billion easily beat projections at $1.62 billion.
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