In another case of the tail wagging the dog, the Dow Jones Industrial Average (INDEXDJX:.
Caterpillar Inc. (NYSE:CAT) is one of the rare losers today, down 0.5%, following the trend set by rival Joy Global Inc. (NYSE:JOY) which is down more than 4% after the company posted a 4.9% decline in revenue that led to a 5.3% drop in third-quarter earnings. Joy Global Inc. (NYSE:JOY)'s results were actually better than Wall Street estimates, but investor optimism is fading, and most expect the next several quarters to be worse because of a slowing Chinese economy and uncertain mining-commodity prices.
The short-term mining weakness will hurt Caterpillar Inc. (NYSE:CAT)'s stock price temporarily, but the long-term view is still solid. Caterpillar Inc. (NYSE:CAT) is the largest global manufacturer of heavy equipment and doesn't look ready to give up its No. 1 position anytime soon. The company also posesses a strong economic moat in its dealer network, which no competitor could replicate in the foreseeable future. Even in a rough patch, Caterpillar Inc. (NYSE:CAT) has repurchased $2 billion of its shares in 2013, and it announced a 15% increase in its quarterly dividend in June, proving it can consistently deliver value to patient investors.
McDonald's Corporation (NYSE:MCD) is a big winner in the Dow Jones Industrial Average (INDEXDJX:.DJI) today, up 1.4%. Yesterday McDonald's Corporation (NYSE:MCD) had its "buy" rating reiterated by analysts at Sterne Agee, according to StockRatingsNetwork.
A new development to watch out for is the debut of McDonald's Corporation (NYSE:MCD) "Mighty Wings" -- another tactic in the broader effort to improve same-store sales -- on Sept. 9. This is an interesting play by McDonald's Corporation (NYSE:MCD), and it makes sense as the popularity of chicken wings continues to surge. One problem that often haunts companies like Buffalo Wild Wings is that wing commodity prices are volatile, quickly affecting bottom-line results if the business model is solely dependent on wings. This will be less of a problem for McDonald's Corporation (NYSE:MCD), with its diverse menu and low-cost position, and if it helps graduate consumers from the dollar menu -- a serious challenge for McDonald's Corporation (NYSE:MCD) lately -- and drive comparable-store sales higher, it will be a big short-term win.