This Day On The Street
Continue to site
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

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 - Get Report) 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 - Get Report) 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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MM $0.00 0.00%
CAT $77.84 0.15%
IR $66.14 0.92%
AAPL $93.66 -0.09%
FB $118.57 0.84%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs