Oct. 19 -- U.S. stocks fell the most in a month after Caterpillar Inc. reduced its earnings forecast and Schlumberger Ltd. said North American revenue decreased.
Caterpillar, the world's largest maker of earthmoving equipment, posted its steepest decline in three months after the U.S. housing recession hurt sales. Schlumberger, the largest oilfield-services company, tumbled the most in five years. Energy producers contributed the most to the Standard & Poor's 500 Index's drop after oil fell from a record.
The retreat pushed benchmark indexes to their biggest weekly loss since July. The S&P 500 slipped 20.46, or 1.3 percent, to 1,519.62 at 11:05 a.m. The Dow Jones Industrial Average declined 209.4, or 1.5 percent, to 13,679.56. The Nasdaq Composite Index fell 42.97, or 1.5 percent, to 2,756.342.
``Companies are not as well poised for growth over the next few quarters,'' Diane Garnick, who helps oversee about $500 billion as investment strategist at Invesco Plc, said in an interview in New York. ``We're going to see declines in the S&P 500.''
Companies in the S&P 500 have posted an average profit decline of 1.8 percent in the third quarter, triple what analysts estimated. About 27 percent of the 118 companies in the index that have reported results so far have missed analysts expectations, compared with 21 percent in the second quarter.
Weekly Drop
The S&P 500 has dropped 2.4 percent this week and the Dow average is down 2.6 percent. The Nasdaq has declined 1.4 percent.
Wachovia dropped 93 cents to $47.21. Earnings per share of 89 cents dropped from $1.17 a year earlier and were below the $1.04 average estimate of 19 analysts surveyed by Bloomberg.
More than one-third of the 92 financial companies in the S&P 500 have reported third-quarter results as of yesterday. Their profit drop is the biggest since Bloomberg began tracking quarterly earnings growth in the third quarter of 1997. Financial firms account for about 19 percent of the S&P 500's value and produced 27 percent of the index's profits last quarter, according to Bloomberg data. The S&P 500 Financials Index has dropped 9.2 percent this year.
``Right now financial stocks are like radioactive waste,'' said Michael James, senior equity trader at Wedbush Morgan Securities in Los Angeles. ``People just do not want to touch them.''
Caterpillar decreased $3 to $74.66. Net income was $1.40 a share, trailing the $1.42 average estimate of analysts compiled by Bloomberg.
Schlumberger lost $8.14 to $103.48. Third-quarter revenue in North America retreated as growth in Canada was offset by lower prices for pressure-pumping services used to produce oil and gas and the departure of rigs from the Gulf of Mexico, the company said.
Crude oil fell 54 cents to $88.93 a barrel on speculation that U.S. supplies are sufficient to meet demand. Earlier it rose above $90 a barrel in New York for the first time. The S&P 500 Energy Index dropped 2.3 percent, its biggest decline since August.
Google Inc. climbed $8.72 to $648.34. Brokerages raised their price projections for the stock after the owner of the most-popular Internet search engine reported better-than-expected earnings and predicted growth from advertisements on mobile phones and YouTube.
Warren Buffett, chairman of Berkshire Hathaway Inc., yesterday denied speculation that he bought shares of Countrywide Financial Corp., the biggest U.S. mortgage company, or Hovnanian Enterprises Inc., a New Jersey-based homebuilder. Neither stock is undervalued, Buffett said in an interview on Fox Business Network.
Countrywide, the worst-performing stock in the S&P 500 this year, lost 74 cents to $15.77. Hovnanian, which has dropped 70 percent since December, added 4 cents to $10.32.
Today is the 20th anniversary of ``Black Monday,'' when an increase in U.S. interest rates and slowing economic growth sparked a panic that sent the Dow average down 23 percent in one day.
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