Stocks Settle Mixed as Investors Take Breather
NEW YORK ( TheStreet) -- Major U.S. stock averages traded mixed Monday even after Caterpillar(CAT) shares popped, as investors took a breather following a substantial run-up in the benchmark indices the prior week.
The tech-heavy Nasdaq advanced slightly; Apple ( AAPL) shares jumped 2.5%.
The Dow Jones Industrial Average was down 14 points, or 0.10%, at 13,882. Monday brought an end to the previous six consecutive positive sessions. Friday was the index's highest close since October 2007.
Caterpillar shares jumped 2% after the heavy construction and mining equipment maker beat fourth-quarter bottom-line expectations and gave cautious guidance.
The S&P 500 was down 3 points, or 0.18%, at 1500. The Nasdaq closed up 5 points, or 0.15%, at 3154 as Apple shares gained. The stock slid by 15% last week after the tech giant's disappointing first-quarter results.
Most sectors in the broader market were down, led lower by basic materials, consumer cyclicals and capital goods. The only sector gainers were technology, conglomerates and utilities.
Volumes totaled 3.31 billion shares on the New York Stock Exchange and 1.86 billion on the Nasdaq. Decliners were outpacing advancers by a ratio of 1.3-to-1 on the Big Board, while advancers were ahead of decliners 1.3-to-1 on the Nasdaq.
David Molnar, partner and managing director at Hightower's Molnar & Nordlicht Group, said with 93% of the S&P 500 trading above their 50-day moving averages, investor bullish sentiment at two-year highs, and the March quarter guidance tending negative, he sees a short-term risk of an overbought situation.
"Our approach towards the market at these levels is to be cautious and use a correction as a buying opportunity," said Molnar. "We see the market heading higher longer term, so we will continue to advocate a healthy high-quality stock allocation as well as adding to those positions at the right price points."
Caterpillar shares were tacked on 2% for Monday after the company posted fourth-quarter profit of $1.91 a share, excluding a non-cash charge of 87 cents a share, on revenue of $16.08 billion. Analysts, on average, were expecting earnings of $1.70 a share in the fourth quarter on revenue of $16.12 billion.
The company said it remains cautious about the global economy. While Caterpillar expects some improvement in the U.S. economy, growth could be relatively weak, the company said.
"We believe China's economy will continue to improve, but not to the growth rates of 2010 and 2011. We also remain concerned about Europe and expect economies in that region will continue to struggle in 2013," Caterpillar CEO Doug Oberhelman said in a press release.