Wall Street flat as Caterpillar rises in turnabout
Stocks were flat on Monday as Caterpillar erased initial declines and turned positive after reporting higher-than-expected profit.
After falling as much as 1.9 percent, Caterpillar's shares reversed course and gained 1.8 percent to $85.38 and were the biggest boost to the Dow after the world's largest maker of tractors posted quarterly earnings.
Caterpillar reported better-than-expected third-quarter profit on a rebound in U.S. sales of heavy equipment.
"Caterpillar is a cyclical stock, and there's always a battle between a slowdown in the economy and growth expectations. The stock is extremely volatile during periods when the economic outlook is uncertain," said Shawn Hackett, president at Hackett Financial Advisors in Boynton Beach, Florida.
Mining company Freeport-McMoRan lost 0.9 percent to $40.82 after it said third-quarter profit fell sharply, missing Wall Street estimates, due to a big drop in gold production in Indonesia.
The S&P appeared once again to be testing the 50-day moving average, which has proven to be a strong support level. A convincing break below could signal further declines.
The Dow Jones industrial average slipped 0.53 point to 13,342.98. The Standard & Poor's 500 Index added 0.69 point, or 0.05 percent, to 1,433.88. The Nasdaq Composite Index gained 7.51 points, or 0.25 percent, to 3,013.14.
Ancestry.com Inc jumped 7.8 percent to $31.46 after the company said it will be acquired by a group led by Europe-based private equity firm Permira in a $1.6 billion deal.
After the closing bell, earnings reports are expected from Yahoo Inc and Texas Instruments Inc . There are 155 S&P 500 components scheduled to report earnings this week.
According to Thomson Reuters data through Monday, of the 123 S&P 500 companies that have reported earnings, 60.2 percent have topped analysts' expectations, shy of the 62 percent average since 1994 and below the 67 percent average over the past four quarters. Earnings are expected to fall 2.4 percent in the third quarter from a year ago.
Top-line expectations have been more discouraging, with 61 percent of companies having missed on revenue expectations.
(Additional reporting by Ryan Vlastelica; Editing by Kenneth Barry)