US STOCKS-Wall Street down on weak earnings, but Boeing rallies

Reuters

* Caterpillar falls after results, chipmakers also drop

* Boeing's rise on higher full-year outlook curbs Dow'sdecline

* China may tighten cash supply to address inflation risks

* Netflix back up after previous day sell off by Icahn

* Indexes off: Dow 0.4 pct, S&P 0.5 pct, Nasdaq 0.7 pct

By Julia Edwards

NEW YORK, Oct 23 (Reuters) - U.S. stocks fell on Wednesdayas shares of Caterpillar and a group of chipmakers tumbled afterthey reported earnings, putting the S&P 500 on course to snap afour-session streak of record highs.

Results from Caterpillar Inc and Boeing Co,two Dow components, illustrated the mixed picture of thethird-quarter reporting season, which has investors concernedabout revenue growth and company forecasts.

Caterpillar was one of the biggest decliners on the S&P,slumping 6.2 percent to $83.64 after the heavy-equipmentmachinery maker cut its full-year outlook for a third time andits profit missed expectations. That sent shares tumbling by themost in a day since September 2011.

On the upside, Boeing surged 4.9 percent to $128.43 afterreporting a rise in adjusted profit and raising its full-yearforecast.

The smaller-than-expected September payrolls number reportedby the Labor Department on Tuesday was seen as another sign ofweakness in the economy.

"Earnings cannot grow if the economy is stalling or stuck inplace," said Tim Courtney, chief investment officer of ExencialWealth Advisors in Oklahoma City, who oversees about $1.2billion in assets. "We are back to a normal scenario whenweakness in the economic numbers is going to start weighing onstock prices."

About a third of S&P 500 companies have reported thus far,with 66.3 percent topping profit expectations, a rate that isslightly higher than the historical average. Roughly 54 percenthave beaten on revenue, below the 61 percent long-term average,though investors worry that much of the growth in reportedearnings has not been generated by revenue.

"In the next couple of years, if we don't have any economicgrowth and companies don't increase their earnings, bonds aregoing to start looking very attractive," said Courtney.

Semiconductor stocks dropped 3.4 percent a day afterBroadcom, Altera and RF Micro Devices joined Intel and Texas Instruments in loweringtheir forecasts.

Broadcom shares fell 4.3 percent to $26.21, Altera lost 13.5percent to $32.24 and RF Micro lost 8.4 percent to $5.65.

The Dow Jones industrial average was down 64.10points, or 0.41 percent, at 15,403.56. The Standard & Poor's 500Index was down 9.53 points, or 0.54 percent, at 1,745.14.The Nasdaq Composite Index was down 28.53 points, or0.73 percent, at 3,901.03.

The S&P 500 closed at an all-time high on Tuesday, itsfourth-straight record finish. The index's 23 percent gain forthe year up to Tuesday was just shy of a 23.5 percent advance in2009.

Global equity markets weakened Wednesday as China's primaryshort-term money rates rose on concerns the People's Bank ofChina may tighten its cash supply to counter inflation risks,which could hurt growth in the world's second-largest economy.Shanghai shares fell 1.3 percent.

Also weighing on sentiment, the European Central Bank saidit would put major euro zone banks through rigorous tests nextyear to build confidence in the sector. Some analysts said thatif the review reveals unexpected problems, investor confidencecould be undermined.

Utilities and consumer staples, considered safe investments during a market downturn, were the only S&P sectors to rise,while all others declined. The energy sector fell the most at1.3 percent. It was led lower by FMC Technologies Inc.,which was down 7.2 percent to $53.60 following results that werebelow analysts' expecations.

Netflix shares were up 1.6 percent to $327.49following a large selloff on Tuesday when billionaire investorCarl Icahn cut his stake in the company.

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