Caterpillar Ignites Fear For Equipment Stocks
By Mercenary Trader: Equipment stocks showed their true colors Wednesday (04/25), failing to keep pace with the major market indices … While Apple's (AAPL) positive earnings announcement sent the bulls into a buying frenzy, the major equipment stocks failed to show up at the party. Bearish action in an otherwise positive environment is definitely a red flag worth digging into (no pun intended) … There were two primary catalysts that drove equipment stocks lower.
- The first quarter earnings report for Caterpillar (CAT) failed to live up to expectations.
- The durable goods report turned out to be the weakest reading in a number of years.
First, the earnings announcement from CAT. On the surface, the report was fairly positive. Q1 EPS rose 29% over last year due to strong domestic sales and healthy demand from mining equipment. Management even raised full-year guidance - although not as much as Wall Street was expecting. Instead ofComplete Story »