This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Slowdown Signals Accelerate

Signs of an economic slowdown are becoming harder to ignore.

Whether it's a fourth straight decline in the Conference Board's leading economic indicators, a yield of just 3.98% on the 10-year Treasury note, a 500-point drop in the Dow since mid-September or commentary from some of the nation's largest industrial companies, evidence of a deceleration in growth is mounting.

"A mini-replay of the second-quarter soft patch may be shaping up," said Steven Wieting, an economist at Smith Barney.

Although Wieting cut estimates on fourth-quarter gross domestic product Thursday, he still believes the Federal Reserve will raise interest rates by more than 100 basis points in 2005, as the economy picks up steam.

But heavy equipment maker Caterpillar (CAT) isn't quite as confident.

"Central Bankers have discussed moving to neutral interest rates, but we expect such moves will be cautious and limited," the firm said in a statement Thursday. "Both moderate economic growth and surplus labor will keep inflation low."

Caterpillar projected that world economic growth will slow to around 3.5% in 2005, from 4% this year. As a result, revenue at the firm is expected to climb just 10% next year, down from a projected 30% jump in 2004.

While Caterpillar posted strong profit and revenue growth in the third quarter, high raw material prices crimped margins and fourth-quarter estimates were not increased, as some had hoped. In response, shares fell almost 4%, or $3.21, to $77.17.

Diversified industrial giant Ingersoll-Rand (IR) also disappointed investors Thursday, despite reporting a 53% jump in earnings during the third quarter. The company said it expects to earn between $1.13 and $1.23 a share in the fourth quarter and between $4.80 and $4.90 for the full year.

According to Thomson First Call, Ingersoll was expected to earn $1.28 in the fourth quarter and $4.90 for the year. The stock fell 3.4%, or $2.34, to $65.76.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs