Dow dropped 78, decliners over advancers 3-2 & NAZ was off 18. The MLP index lost 2+ to the 315s & the REIT index was down 2+ to the 302s. Junk bond funds were mixed to lower & Treasuries rallied when stocks were sold. Oil rose to the 45s & gold had a good day, holding above 1150.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.1371480203786638)
Caterpillar, a Dow stock, reduced its sales forecast for the 2nd time in 2 months & said it will cut as many as 10K jobs over 4 years in response to a slowdown in the mining & energy industries. The company lowered its 2015 revenue projection by $1B to $48B & said sales are expected to drop 5% next year. The job cuts are part of a plan to save about $1.5B of operating costs annually. CAT is heading for its first 4-year decline in sales in its 90-year history. The retrenchments come 4 years after the company spent $7.5B on its biggest ever deal, buying Bucyrus Intl to expand into mining equipment. Since then, a slowdown in China has sent coal & metals prices into a slump, hurting mining customers. CAT also sells equipment to the energy industry, which is suffering from lower oil prices. The cutbacks follow similar moves by its customers as investors push for operational improvements to protect returns. The stock has lost 29% this year, which would be the biggest annual slump since 2008. The job cuts represent up to 9% of the company’s 111K headcount in Q2. They follow a 5.5% reduction in 2013. Consolidation & closings of factories may affect more than 20 plants. In Jul, CAT also lowered its sales guidance by $1B. "We are facing a convergence of challenging marketplace conditions in key regions and industry sectors – namely in mining and energy," CEO Doug Oberhelman said. “While they are the right businesses to be in for the long term, we have to manage through what can be considerable and sometimes prolonged downturns.” The stock slumped 4.40 (to a level not seen since the middle of 2010). If you would like to learn more about CAT, click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Fewer Americans than forecast filed applications for unemployment benefits last week, a sign that a steady labor market will bolster growth. Jobless claims rose 3K to 267K according to the Labor Dept. The forecast called for 272K. The 4-week moving average, a less-volatile measure of job cuts, dropped to the lowest level in more than a month. Claims are hovering near historically low levels as employers retain workers to cater to sales growth. Rising demand for labor, including steady payrolls growth & more job openings, will help to sustain household spending, the biggest part of the economy. The 4-week moving average decreased to 271K last week from 272K. The number continuing to receive jobless benefits was little changed at 2.24M & the unemployment rate among people eligible for benefits held at 1.7%. Since early Mar, claims have been below the 300K level that is typically consistent with an improving job market.
Boeing, another Dow stock, won orders & commitments from China for 250 narrowbody 737 aircraft & 50 widebody aircraft, valued at about $38B (at list prices). The order, announced as Chinese pres Xi Jinping toured the BA factory in Washignton, includes some planes that were previously ordered but for which the buyers had not been identified. After walking thru a parked 787 Dreamliner, Xi told hundreds of employees that he sees bright prospects for future collaboration between China & BA. CEO Dennis Muilenburg thanked Xi for the orders & called his visit a "testament" to the relationship between the US, BA & China. Earlier, China's ICBC Financial Leasing, a unit of the Industrial & Commercial Bank of China, separately confirmed it will buy 30 of the 737-800 jets, worth $2.88B (at list prices). BA also was due to announce an agreement to build a 737 completion center in China that would finish, paint & deliver 737s built at its factory in Washington. China's order, while large, was a small percentage increase on the company's backlog of 5.7K aircraft & had been expected. BA says China will need $1T worth of new planes over the next 2 decades. The stock fell 1.92. If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
This was a choppy day & the Dow finished 170 about its lows. But down is down, not welcomed by the bulls. Janet will give a speech after the markets close & traders worry. The 3rd release for GDP data will be given before the open tomorrow, & traders are nervous even though this historical data should have virtually no effect on any decision about raising interest rates going forward. The CAT announcement was a downer, prior to the start of earnings season next month. Dow is down 328 in Sep, making for a dreary month.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLX15.NYM | ....Crude Oil Nov 15 | ....44.70 |  ...0.22 | (0.5%) |
Caterpillar, a Dow stock, reduced its sales forecast for the 2nd time in 2 months & said it will cut as many as 10K jobs over 4 years in response to a slowdown in the mining & energy industries. The company lowered its 2015 revenue projection by $1B to $48B & said sales are expected to drop 5% next year. The job cuts are part of a plan to save about $1.5B of operating costs annually. CAT is heading for its first 4-year decline in sales in its 90-year history. The retrenchments come 4 years after the company spent $7.5B on its biggest ever deal, buying Bucyrus Intl to expand into mining equipment. Since then, a slowdown in China has sent coal & metals prices into a slump, hurting mining customers. CAT also sells equipment to the energy industry, which is suffering from lower oil prices. The cutbacks follow similar moves by its customers as investors push for operational improvements to protect returns. The stock has lost 29% this year, which would be the biggest annual slump since 2008. The job cuts represent up to 9% of the company’s 111K headcount in Q2. They follow a 5.5% reduction in 2013. Consolidation & closings of factories may affect more than 20 plants. In Jul, CAT also lowered its sales guidance by $1B. "We are facing a convergence of challenging marketplace conditions in key regions and industry sectors – namely in mining and energy," CEO Doug Oberhelman said. “While they are the right businesses to be in for the long term, we have to manage through what can be considerable and sometimes prolonged downturns.” The stock slumped 4.40 (to a level not seen since the middle of 2010). If you would like to learn more about CAT, click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Caterpillar Cuts Jobs and Forecasts as Commodity Slump Bites
Caterpillar (CAT)
Fewer Americans than forecast filed applications for unemployment benefits last week, a sign that a steady labor market will bolster growth. Jobless claims rose 3K to 267K according to the Labor Dept. The forecast called for 272K. The 4-week moving average, a less-volatile measure of job cuts, dropped to the lowest level in more than a month. Claims are hovering near historically low levels as employers retain workers to cater to sales growth. Rising demand for labor, including steady payrolls growth & more job openings, will help to sustain household spending, the biggest part of the economy. The 4-week moving average decreased to 271K last week from 272K. The number continuing to receive jobless benefits was little changed at 2.24M & the unemployment rate among people eligible for benefits held at 1.7%. Since early Mar, claims have been below the 300K level that is typically consistent with an improving job market.
Jobless Claims in U.S. Increased Less Than Forecast Last Week
Boeing, another Dow stock, won orders & commitments from China for 250 narrowbody 737 aircraft & 50 widebody aircraft, valued at about $38B (at list prices). The order, announced as Chinese pres Xi Jinping toured the BA factory in Washignton, includes some planes that were previously ordered but for which the buyers had not been identified. After walking thru a parked 787 Dreamliner, Xi told hundreds of employees that he sees bright prospects for future collaboration between China & BA. CEO Dennis Muilenburg thanked Xi for the orders & called his visit a "testament" to the relationship between the US, BA & China. Earlier, China's ICBC Financial Leasing, a unit of the Industrial & Commercial Bank of China, separately confirmed it will buy 30 of the 737-800 jets, worth $2.88B (at list prices). BA also was due to announce an agreement to build a 737 completion center in China that would finish, paint & deliver 737s built at its factory in Washington. China's order, while large, was a small percentage increase on the company's backlog of 5.7K aircraft & had been expected. BA says China will need $1T worth of new planes over the next 2 decades. The stock fell 1.92. If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing Wins $38B in Orders from China
Boeing (BA)
This was a choppy day & the Dow finished 170 about its lows. But down is down, not welcomed by the bulls. Janet will give a speech after the markets close & traders worry. The 3rd release for GDP data will be given before the open tomorrow, & traders are nervous even though this historical data should have virtually no effect on any decision about raising interest rates going forward. The CAT announcement was a downer, prior to the start of earnings season next month. Dow is down 328 in Sep, making for a dreary month.
Dow Jones Industrials
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