Cat Stock Blog

Reports of record-high short interest, lousy prospects for non-residential construction and a gloomy-Gus Morgan Stanley analyst beat the stuffing out of Caterpillar shares, taking them down by over 7 percent before a few merciful buyers showed up and reminded people that the earthmover market was not coming to an end. Complete quote at Yahoo Finance.

The broad indexes took a milder beating after the Fed stated the obvious about the economy needing an intravenous Prozac injection. Energy and financials bore the brunt. Dow, down 2.94%; S&P 500, down 3.34%; Nasdaq, down 3.67%. Recap at Market Watch.

Mild cause for optimism: bounce of a couple percentage points off the morning low and no sell-off into the close. More serious cause for concern: Volume was nearly 16 million shares, a healthy pop from the 10 million range where Cat had been trading of late.

Caterpillar’s showing Tuesday reminds us how much better we feel when somebody stops punching us in the face. A quick jump to the upside at the open turned into a mildly annoying downward grind followed by a nice recovery into the close. Grandma always taught me never to complain about any up days in a bear market (even if you’re stuck with a bushel of worthless naked puts; “you had it coming,” she’d say). Full quote at Yahoo Finance.

Broader indexes were mixed: Dow, down .3% ; S&P 500, up .18% ; Nasdaq, up .5%. More at Market Watch’s closing recap.

Points for optimism: Oil prices recovered a bit and the market will get bored with pummeling Alcoa any day now. Neither price nor volume had much to say today. Expect lots of holding one’s breath and walking on pins and needles till Cat announces its earnings Jan. 26.

There’s a faint whistle from the air leaking out of investors’ hopes for 2009. Caterpillar started out slowly and slipped all day, shaving 2 bucks from Friday’s close while oil prices dipped yet again and traders anticipated more bad news from aluminum giant Alcoa, which delivered after the bell, saying it had lost a billion dollars in the last quarter. Just for fun, the financials got beat up again, too. More on Cat at Yahoo Finance.

The bloodletting was less, well, bloody among the broader indexes, which were all down nevertheless: Dow, minus-1.46%; SP 500, minus-2.26%; Nasdaq, minus-2.09%. More at Market Watch.

A couple scraps of good news: Caterpillar had just a touch more volume today at 9.1 million shares compared to 8.9 million on Friday, so the selling conviction is not super strong; and Cat is still up 29 percent from its 52-week low of 31.95 on Oct. 24.

If you believe the year’s first week set’s the tone for the next 51, you might not want to be stocks in 2009. Caterpillar, among the companies best-poised to rebound when good times return, took an eight percent drubbing from last Friday’s close (46.9) to today’s (43.20). Cat’s chart for the week is courtesy of Yahoo Finance.

A couple slivers of good news in today’s action: Cat rallied off its daily low on below-average volume. We didn’t see the worst outcome: selling off into the close on above-average volume.

How the broader averages fared: Dow, down 1.64%; Nasdaq, down 2.81; S&P 500, down 2.13. More at Market Watch’s daily wrap. The dip in the Nasdaq worries me the most; it’s almost impossible for the market to rally with out the techs along for the ride.

Yesterday’s harrowing dive turned into this morning’s red-tinted disappointment, but Caterpillar rallied into the close to finish a few baby steps into the green at 44.02. Wal-Mart, one of the only Dow companies to finish 2008 in the plus column, gave everybody a chill by lowering its guidance, but by the end of the day, as word emerged of a plan to help struggling homeowners, the markets started inching back up again. More at the Wall Street Journal.

The indexes were a mishmash: S&P and Nadaq up a scratch, the Dow a slice into the red. More at Yahoo Finance.

It’s never wise to read too much into a single day’s move, but today’s Cat chart reads more characteristically of a bull market than a bear: starting out low and climbing the wall of worry to close on its high. Much worse is the day that starts out high and collapses — the typical move of a slope-of-hope bear trend. Today’s Cat volume, 9.3 million, is just a shade higher than yesterday’s, but not enough to mean much one way or the other, I suspect.

A massive build-up in crude oil inventories shelled the oil futures to the tune of 12 percent and bad news from Alcoa, Intel and a fraudulent Indian outsourcing firm put everyone in a selling mood. Caterpillar helped lead the downhill slide, giving up 4.65 percent to close at 43.67, down 2.13. from Tuesday’s close. More at finance.yahoo.com

Things weren’t quite so bloody in the broader indexes: The Dow lost 2.72%, the Nasdaq lost 3.23% and the S&P 500 fell 3.00%. More at the Market Watch wrap.

For all the Obama-mania over infrastructure possibilities, I don’t see what keeps the legs under a rally when the bad news keeps raining down like this.

More of the steam escaped from Caterpillar’s recent rally as more bad news on the construction and manufacturing fronts pinched Cat’s prospects.

After a close of 46.08 yesterday, Cat opened at 46.79, rose to a high of 46.80, dipped a bit and remained range bound, then sank into the close to finish at 45.80 on volume of 10.8 million shares. More at Cat’s Yahoo Finance page.

Broader indexes were up a bit, with the Nasdaq leading the way with a 1.5% pop. More at MarketWatch’s wrap.

Two days of closes in the red strikes me as a less-than bullish start for the first full week of the year, though the volume is around average so this might be one of those yawner days nobody remembers.

Pathetic December car sales didn’t punish the markets all that badly, though profit-taking on Caterpillar was a bit more extreme than the broader indexes.

Closing numbers

Credit: BigCharts.com

So long, Santa

• Friday’s close, 46.91
• Today’s open, 46.90
• Range: 45.81-47.12
• Close: 46.09, -.82 (-1.77%)
• Volume: 11 million

The Indexes:

• Dow, 8,952.89, -81.80 (-0.91%)
• S&P 500, 927.45, -4.35 (-0.47%)
• Nasdaq, 1,628.03, -4.18 (-0.26%)

A bit troubling for the bulls is that Cat’s back to its normal volume range and closed near its low for the day. You’d think if everybody was so gall-durned optimistic about Cat’s prospects, a volume boost might’ve sent the shares higher.

Caterpillar catapulted into 2009 as traders flipped the bird at dismal manufacturing numbers on the next to last day of the annual Santa Claus rally.

Closing numbers

Credit: BigCharts.com

Santa leaving town soon?

• Wednesday’s close, 44.67
• Today’s open, 42.57
• Range: 44.71 - 46.98
• Close: 46.91, +2.24 (+5.01%)
• Volume: 7,096,138

The Indexes:

• Dow, 9,034.69 +258.30 (+2.94%)
• S&P 500, 931.80 +28.55 (+3.16%)
• Nasdaq, 1,632.21 +55.18 (3.50%)

Best news is that techs led the market higher; I never trust a rally that leaves out the Nasdaq. Of course, 3 percent pops to the upside are more characteristic of bear market short squeezes, especially when all the economic news remains gloomy. Cat volume was comparatively thin, though better than Wednesday.

Caterpillar got a nice pop on a day when the market kissed off a host of bad news and decided to rally.

Closing numbers

credit: bigcharts.com

3% of something

• Monday’s close, 42.34
• Today’s open, 42.57
• Range: 42.01-43.75
• Close: 43.66, +1.32 (+3.12%)
• Volume: 5,006,684

The Indexes:

• Dow, 8668.39, +184.46 (+2.17%)
• S&P 500, 890.64, +21.22 (+2.44%)
• Nasdaq, 1550.7, +40.38 (+2.67%)

Bulls would like to see higher volume to confirm the rally’s got legs, but we’ll take any good news these days.