Caterpillar, Inc. (CAT), Microsoft Corporation (MSFT): Dow (.DJI) Continues to Fall Alongside Investor Sentiment

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Though some expected the Dow Jones Industrial Average to regain some momentum this morning, its higher open was quickly lost following some unexpected economic news. With investor confidence continuing to wane, the index is in need of positive earnings news from its components — more aid that went undelivered this morning. With losses piling up, the Dow has little help in its efforts to reach higher still.

Caterpillar (NYSE:CAT) Trying to Spark a Flatlining DowExisting-home sales were expected to rise to a seasonally adjusted annual rate of 5.01 million units, but instead investors received the news that sales fell 0.6% in March. This is despite the continued strength in the rebounding housing market, which is one of the only drivers keeping the U.S. economy afloat. Though the decline in sales is not a promising turn of events, home prices did rise during March, giving support to the continuation of the recovery. The increase is largely due to decreased inventory of existing homes, which can help sellers raise prices but hurt overall sales figures.

Caterpillar, Inc. (NYSE:CAT) announced disappointing, though not entirely unexpected, earnings this morning. Largely due to a slowdown in demand of heavy machinery from mining customers, the company had a 17% drop in sales for the first quarter. The decline in sales resulted in profits that were nearly half those of the year-ago quarter — $880 million versus 2012’s $1.59 billion. Caterpillar, Inc. (NYSE:CAT) revised its 2013 outlook to the lower end of its previous guidance, $7 per share on sales of $57 billion to $61 billion, with CEO Doug Oberhelman stating that the revision represents a 50% cut in sales due to the decline in mining customer demand. The company will begin a share buyback program that it shelved for five years, with up to $3.7 billion in shares on the table before the end of 2015.

In other news
With only six components in positive territory as of 11 a.m. EDT, the Dow has had little help in any effort to make up for its losses from last week. But Microsoft Corporation (NASDAQ:MSFT) is leading the charge, up 3.95% so far in trading. With a new effort geared toward customers wary of vague privacy policies and disclosure practices, Mr. Softy has rereleased a new commercial highlighting the potential threat to consumers who inadvertantly let private information go public. The new spot delivers several scenarios, while providing insight into how the company’s beefed-up policies will protect you while using Internet Explorer. In its latest bid to drive customers away from Google Inc. (NASDAQ:GOOG) , Microsoft Corporation (NASDAQ:MSFT) is taking a less direct approach than its “Scroogled” campaigns. With Google having recently been forced to change its policies as the result of a European investigation, now may be the time for Microsoft Corporation (NASDAQ:MSFT) to up the ante.

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