While you were sleeping: Boeing, Caterpillar lift outlook

BUSINESSDESK: Boeing and Caterpillar upgraded their full-year profit forecasts, providing a lift to Wall Street, as did bank stocks.

Boeing shares were last up more than 3% and those of Caterpillar rose 2%.

Caterpillar chief executive officer and chairman Doug Oberhelman said he is "cautiously optimistic about the world economy in 2012".

"While we're expecting a record year in 2013, we understand the world is facing economic challenges, and if it becomes necessary we are prepared to act quickly as we did in late 2008 and 2009," he said.

"While we're prepared, the good news is that this doesn't feel like 2008. Interest rates are low, central banks are prepared to inject more liquidity if needed and housing is coming off lows, not a peak, and seems to be improving." 

Of the 195 companies in the Standard & Poor's 500 Index that have reported earnings to date for the second quarter, 64.6% have reported earnings above analysts' expectations, according to Reuters.

Apple did not surpass forecasts, however. Shares were last 3.6% weaker, after posting disappointing results following yesterday's market close. Many of the company's bullish analysts remain so.

While some cut their price targets, most see the dip in the shares as a buying opportunity.

Investors opted to focus on the positive trend in housing after Commerce Department data released today showed that single-family home sales plunged 8.4% to a seasonally adjusted 350,000-unit annual rate, the lowest in five months.

Last week separate reports on new home construction in June and on confidence among home builders in July indicated a trend of strength and recovery.

"It is hard to believe the market is turning downward when the home builders' confidence index jumped in July to its highest level in over five years," Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told Reuters.

"Either developers are clueless or the data have yet to catch up with reality. I am on the side of the latter."

In late afternoon trading in New York, the Dow Jones Industrial Average rose 0.82%, the Standard & Poor's 500 Index gained 0.26%, while the Nasdaq Composite Index eked out a 0.08% advance.

Europe's Stoxx 600 Index ended the day with a 0.1% decline on the previous close.

The most recent data showed a continuation of the sombre trend in the eurozone. The UK's second-quarter gross domestic product fell a bigger-than-expected 0.7% from the first quarter.

“The UK gross domestic product number was a bit of a startler,” Mike Lenhoff, chief strategist at Brewin Dolphin Securities in London, told Bloomberg.

“After three quarters of negative growth, the UK’s now firmly in the European camp of stagnation. Decent earnings results, particularly from the big international companies, are providing some support.”

In Germany, a gauge of business confidence fell in July to the lowest level since March 2010, while the yield on Spain's two-year notes rose as high as 7.15% earlier today, rising above 7% for the first time since the introduction of the euro.

Even so, the euro received a lift, climbing against the greenback and the yen, as European Central Bank council member Ewald Nowotny said there were arguments in favour of giving the region’s rescue fund a banking licence.

The euro was last up 0.7% at US$1.2147.