Stocks retreat from highs
Caterpillar, Google results rattle investors.
Published July 21, 2007
NEW YORK - Wall Street pulled back Friday from record levels following disappointing results from longtime favorites Caterpillar Inc. and Google Inc. The Dow Jones industrials fell nearly 150 points.
The drop in stocks capped a losing week for the Dow after three weeks of gains. On Thursday, the blue chips finished above 14,000 for the first time, and the Standard & Poor's 500 index logged a record close.
While Friday's retrenchment might not be surprising following weeks of somewhat volatile trading and the big gains Thursday, Caterpillar has been one of the best performers among the 30 stocks that make up the Dow and a big contributor in the blue chips' march to 14,000. The heavy equipment maker unnerved investors when its results came in well below expectations.
Jitters over subprime lending - loans to risky customers - also weighed on the stock market and led investors to buy up safer Treasury bonds instead. As Treasury prices rose, the benchmark 10-year note's yield dropped sharply to 4.95 percent from 5.03 percent late Thursday.
Meanwhile, technology shares took a hit after a strong run Thursday. Google turned in a second-quarter profit that fell short of Wall Street's high expectations, while Microsoft Corp.'s earnings report wasn't impressive enough to alleviate investors' concerns about the sector.
"As people start to absorb the numbers and start to see the second-quarter numbers aren't as good as the first quarter, that starts to create some pullback a bit," said Nick Raich, director of research at National City Private Client Group.
The Dow fell 149.33, or 1.07 percent, to 13,851.08. The index earlier declined by as many as 200 points and finished the week down 0.40 percent.
Broader stock indicators also lost ground. The S&P 500 index fell 18.98, or 1.22 percent, to 1,534.10, and ended the week 1.19 percent lower. The Nasdaq composite index fell 32.44, or 1.19 percent, to 2,687.60, and finished down 0.72 percent for the week.
Two companies' shares paid a high price for disappointing earnings:
Caterpillar: down $3.78, or 4.4 percent, to $83.20
Google: down $28.47, or 5.2 percent, to $520.12
[Last modified July 20, 2007, 23:09:38]
[an error occurred while processing this directive]