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Caterpillar profit holds blue chip stocks up on Wall Street

A jump in Caterpillar shares after a strong earnings report held up the blue chip stocks index on Wall Street as the broader market slipped.Concerns about US government policy moves affecting the financial and healthcare industries had a dampening effect

Nevil Gibson
Tue, 27 Apr 2010

A jump in Caterpillar shares after a strong earnings report held up the blue chip stocks index on Wall Street as the broader market slipped.

Concerns about US government policy moves affecting the financial and healthcare industries had a dampening effect on those sectors.

Caterpillar rose 4.6% after it reported a swing to a first-quarter profit. The machinery maker also raised its 2010 outlook for revenue and profit – a promising sign for traders who view Caterpillar as a key barometer of global manufacturing activity.

The Dow Jones Industrial Average was in positive territory for all of the session but sagged toward the end of the session to close less a point higher at 11,205.03.

The Nasdaq Composite Index fell 0.3% to 2522.95 while the S&P 500 was down 0.4% at 12112.05, hurt by a 1.1% retreat in its financial sector, which was under pressure after senior Democrat denators reached a tentative deal on sweeping new rules for derivatives trading.

Under the deal, banks would have to spin off their derivatives trading desks in order to be eligible for federal assistance in future market crises.

JP Morgan Chase, Goldman Sachs and Morgan Stanley each fell more than 2%. Citigroup tumbled 4.1%, after the Treasury Department said it would sell up to 1.5 billion shares in the bailed-out bank, the first step in the government's plan to unwind its entire 7.7 billion-share stake.

Other markets: Europe, Asia up

Miners and industrial stocks gained in Europe, underscoring investors' belief that the global economy is recovering.

But Greece's stock market dropped for the fourth consecutive session, as investors appeared far from appeased by the country's formal request for financial aid.

The pan-European Stoxx 600 index closed up 1% at 270.10.

The U.K.'s FTSE 100 added 0.5% to 5753.85, Germany's DAX rose 1.2% to 6332.10 and France's CAC-40 firmed 1.2% to 3997.39.

The Athens General Index slumped 2.9% to 1804.91, its lowest level since April 7, 2009. It has skidded 8% over the past four sessions.

Most Asian markets climbed, with Japanese exporters posting handsome gains on the yen's recent fall, while energy sector shares rallied as crude oil prices stayed at elevated levels.

Japan's Nikkei Stock Average of 225 companies was the strongest performer of the day, rising 2.3% to 11,165.79. Canon climbed 3.5%, Toyota gained 3.4%, while Suzuki jumped 4.2%.

Hong Kong's Hang Seng Index advanced 1.6% 21,587.06, rebounding as investors looked for bargains after the market posted losses in five of the previous six sessions.

Korea's Kospi added 0.9% to 1752.20 for its highest finish in more than a year. Taiwan's Taiex rose 1.9% to 8158.14. India's Sensex gained 0.3% to 17,745.28 and Singapore's Straits Times advanced 0.4% 3002.62.

Commodities: Oil down, gold up

Crude oil futures lost ground as traders feared last week's strong economic data that pushed oil above $US85 a barrel may also push the US Federal Reserve closer toward eventually raising interest rates.

Light, sweet crude for June delivery declined 56USc to $US84.56 a barrel in New York. Brent crude on the ICE futures exchange reached a new 19-month high of $US87.75 a barrel overnight, but have since retreated slightly to $US86.87 a barrel, down 40USc.

Gold futures traded modestly higher. The most-actively traded June contract was up $US1.20, or 0.1%, at $US1154.90 an ounce in New York. Thinly traded nearby April gold was up $US1.40, or 0.1%, at $US1154.50 an ounce.

Currencies: Euro, yen down

The euro recovered from earlier lows after German Chancellor Angela Merkel said Greece must meet tough conditions to secure aid from its euro-zone partners.

Uncertainty over Greece's negotiations put pressure on the euro against the UK pound as well as the greenback.

The euro was at $US1.3334, up from a session low at $US1.3291 but down from $US1.3372 late on Friday.

The dollar was at ¥94.13 from ¥94.06, while the euro was at ¥125.50 from ¥125.78.

The pound was at $US1.5450 from $US1.5369.

Nevil Gibson
Tue, 27 Apr 2010
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Caterpillar profit holds blue chip stocks up on Wall Street
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