Mario Tama/Getty Images
Traders work on the floor of the New York Stock Exchange moments before the closing bell July 19, 2007 in New York City. The Dow closed above 14,000 for the first time finishing at 14,000.41.
Traders work on the floor of the New York Stock Exchange moments before the closing bell July 19, 2007 in New York City. The Dow closed above 14,000 for the first time finishing at 14,000.41. Mario Tama/Getty Images
A day after closing above the 14,000-point threshhold for the first time, the Dow Jones industrial average retreated nearly 150 points Friday in response to disappointing corporate earnings and investors taking profits.
The Dow fell 149.33, or 1.07 percent, to 13,851.08. Friday's slip left the widely watched market barometer slightly lower than at the start of the week.
Caterpillar Inc., a heavy equipment maker, and Google, Inc., an Internet search engine, reported weaker-than-expected results Friday for the second quarter ended June 30.
"As people start to absorb the numbers and start to see the second-quarter numbers aren't good as the first quarter, that starts to create some pullback a bit," said Nick Raich director of research at National City Private Client Group.
Caterpillar is one of 30 stocks that comprise the Dow and had been one of the best-performing stocks in the Dow, significantly contributing in the blue-chip rally to 14,000. Google is not a component of the Dow Jones industrial average, but its performance is closely watched by investors.
The Dow slid as much as 200 points before trimming losses.
While some investors were taking from the rich market, the below-par corporate earnings caused a bit of panic.
Peoria, Ill.-based Caterpillar's net income tumbled 21 percent to $823 million, or $1.24, from $1.04 billion, or $1.52 in the same period a year ago.
"Disappointing earnings in the second quarter were attributable to the sharp negative swing in on-highway truck engine profitability, weakness in North American machine sales, continued selected supply chain disruptions and higher material costs," Chairman and CEO Jim Owens said in a statement.
Revenue climbed 7 percent to $11.36 billion compared with $10.61 billion last year.
"The strength of economies outside of North America, our broad global footprint and growth in diversified service businesses all helped us deliver higher sales," Owens said.
Caterpillar was the weakest performer Friday among the Dow stocks, falling $3.78, or 4.4 percent, to $83.20.
Mountain View, Calif.-based Google's profit fell short of expectations as staff expenses weighed on the bottom line. The aggressive spending caught some analysts off guard.
Google reported net income of $925.1 million, or $2.93, compared with $721.1 million, or $2.33. Revenue of $3.87 billion for the quarter rose 58 percent from $2.46 billion last year.
Shares of Google fell $28.47, or 5.2 percent, to $520.12.
From NPR reports and The Associated Press