Better earnings from Boeing, Caterpillar boost Dow

Associated Press
FILE-- A June 25, 2012 file photo shows Specialist Christopher Trotta working on the floor of the New York Stock. Wall Street was poised for a muted open Tuesday June 26, 2012, with both Dow futures and the broader S&P 500 futures up 0.2 percent.   A parade of grim news sent investors fleeing stocks for a third straight day on Tuesday July 24, 2012. (AP Photo/Richard Drew/file)
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FILE-- A June 25, 2012 file photo shows Specialist Christopher Trotta working on the floor of the New York Stock. Wall Street was poised for a muted open Tuesday June 26, 2012, with both Dow futures and the broader S&P 500 futures up 0.2 percent. A parade of grim news sent investors fleeing stocks for a third straight day on Tuesday July 24, 2012. (AP Photo/Richard Drew/file)

NEW YORK (AP) — Stronger earnings from Boeing and Caterpillar sent the Dow Jones industrial average higher Wednesday, but gains in the broader market were held back by a sharp drop in new home sales and a rare earnings miss from Apple.

The Dow was up 100 points at 12,718 at 2:30 p.m. EDT. The Dow is coming off three triple-digit losses in a row.

The Standard & Poor's 500 rose four points to 1,343 and the technology-heavy Nasdaq composite was up four points to 2,867. The Nasdaq's biggest component, Apple, dropped $22.12 to $578.80, a loss of 4 percent.

Boeing rose $2.19, or 3 percent, to $74.22 after surprising investors with higher earnings. The aircraft maker also raised its profit forecast for all of 2012.

Caterpillar, which makes mining and construction equipment, rose $1.36, or nearly 2 percent, to $82.79. The company blew away analysts' estimates with a 67 percent surge in profits for the second quarter. Caterpillar credited strong sales of mining equipment overseas and a strengthening housing market.

Stocks rose after the opening bell, then turned mixed after the government reported sales of new homes plunged 8 percent last month, the steepest drop since February last year. Sales in the Northeastern U.S. plummeted 60 percent. The decline suggests a weaker job market is dampening any pickup in the industry.

"Housing is not really recovering, it's bottoming," said Steven Ricchiuto, chief economist at Mizuho Securities, a brokerage firm. "That's still a problem with the economy."

Home builders were hit hard. Beazer Homes fell 10 cents, or 4 percent, to $2.38. KB Home lost 31 cents, or 3 percent, to $9.32.

Netflix plummeted $19.76 to $60.63, a loss of 25 percent. The video subscription company reported late Tuesday that its net income plunged 91 percent in the latest quarter. Investors are worried about rising licensing fees and slowing subscriber growth. Netflix repeated warnings that it is likely to lose money at the end of year as it builds its services abroad.

In Europe, stock indexes were mostly higher. A European Central Bank policymaker said the region's bailout fund should be given the power to borrow money from the central bank, increasing its financial resources. That would be necessary if Spain asked for a bailout.

The yield on the Spain's 10-year government bond fell to 7.37 percent from 7.53 percent late Tuesday. That's a positive sign that investors are slightly less worried about Spain's ability to repay its debts.

Borrowing costs for Spain have risen to dangerously high levels in recent days as investors fear that the country will have no choice but join Greece, Portugal and Ireland in asking for a financial lifeline to pay its bills.

In other U.S. corporate news, computer security provider Symantec soared $1.78 to $14.95. The company announced the departure of its CEO, Enrique Salem, and reported earnings per share and revenue came in well ahead of Wall Street's estimates.

WellPoint, the nation's second largest insurer, lowered its earnings forecast. Its stock fell $7.82, or 13 percent, $53.60, the biggest one-day drop for the stock in more than three years. The insurer said enrollment has been slipping as companies cut jobs.

Corning said its second-quarter profit sank 39 percent on lower sales volumes and prices of its liquid-crystal-display glass products. Its stock fell 86 cents to $11.21, or 7 percent.

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