Caterpillar ( CAT) shares rose sharply Monday, a day before the industrial bellwether is set to release quarterly results.

Upgraded by equities analysts at Bank of America ( BAC)- Merrill Lynch ( MER), Caterpillar stock had jumped 6%, or $2.14, to $36.08 in midday trading Monday, on a volume of 13.6 million shares. The stock's average daily turnover is 13.3 million.

The analysts hiked their rating on Caterpillar stock to buy from neutral even as they reduced their earnings projections and said that the heavy-equipment manufacturer's second-quarter bottom line would miss Wall Street targets.

The analysts appeared to be basing their optimism on their belief that the construction-equipment market had bottomed.

They also increased their price target from $36 to $45.

An average of analysts' estimates has put the company's second quarter profit at 22 cents a share, down from the year-ago period's $1.74 a share.
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