* Caterpillar falls after results, chipmakers also drop
* Boeing rise curbs Dow's decline on higher full-year
* China may tighten cash supply to address inflation risks
* Indexes off: Dow 0.5 pct, S&P 0.5 pct, Nasdaq 0.6 pct
By Ryan Vlastelica
NEW YORK, Oct 23 U.S. stocks fell on Wednesday
as shares of Caterpillar and a number of chipmakers tumbled in
the wake of results, putting the S&P 500 on track to snap a
four-session streak of record highs.
The earnings of two Dow components underlined how mixed the
corporate reporting season has been, with investors concerned
about revenue growth and company forecasts.
Caterpillar Inc was one of the biggest decliners on
the S&P, slumping 6 percent to $83.83 after the heavy-equipment
machinery maker cut its full-year outlook for a third time and
its profit missed expectations. That sent shares tumbling by
their most in a day since September 2011.
On the upside, Boeing Co surged 4.1 percent to
$127.50 after reporting a rise in adjusted profit and raising
its full-year forecast.
"We've seen a mixed bag as far as earnings go, and
comparisons will only get harder next quarter," said Jerry
Villella, investment specialist for JP Morgan Private Bank in
Dallas. "You have to be more careful about where you invest. We
have more modest expectations going forward."
About a third of S&P 500 companies have reported thus far,
with 66.3 percent topping profit expectations, a rate that is
slightly higher than the historical average. Roughly 54 percent
have beaten on revenue, below the 61 percent long-term average.
Villella, who helps oversee about $935 billion in assets,
said some sectors, like financials, were proving to be strong,
"though technology is a bifurcated story."
Semiconductor stocks dropped 3 percent a day after
Broadcom, Altera and RF Micro Devices
joined Intel and Texas Instruments on a list of
semiconductor companies that have unveiled underwhelming
quarterly forecasts this past week.
Broadcom shares fell 1.6 percent to $26.72, Altera lost 13
percent to $32.52 and RF Micro lost 8.3 percent to $5.65.
The Dow Jones industrial average was down 68.99
points, or 0.45 percent, at 15,398.67. The Standard & Poor's 500
Index was down 9.14 points, or 0.52 percent, at 1,745.53.
The Nasdaq Composite Index was down 25.14 points, or
0.64 percent, at 3,904.43.
The S&P 500 closed at an all-time high on Tuesday, its
fourth straight record. Its 23 percent gain on the year to
Tuesday was just shy of its 23.5 percent advance in 2009, the
index's best year over the past decade.
Global equity markets weakened Wednesday as China's primary
short-term money rates rose on concerns the People's Bank of
China may tighten its cash supply to address inflation risks,
which could hurt growth in the world's second-largest economy.
Shanghai shares fell 1.3 percent.
Further hurting sentiment, the European Central Bank said it
would put top euro zone banks through rigorous tests next year
to build confidence in the sector. Some analysts said that if
the review reveals unexpectedly large problems, investor
confidence could be undermined.
The S&P financial sector index fell 0.8 percent.
Among the European banks traded on U.S. exchanges, Barclays Plc
fell 2.1 percent to $17.34 and Deutsche Bank lost
1.8 percent to $49.48.
A unit of Samsung Electronics could become the
biggest shareholder of Corning Inc, the maker of
scratch-resistant Gorilla Glass used in many mobile gadgets.
Corning shares jumped 12 percent to $17.22.
Shares of Cree Inc fell 15 percent to $63.25 after
the maker of light-emitting diodes forecast current-quarter
earnings below analysts' estimates.