US STOCKS-Wall Street ends down on weak earnings, 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

* Indexes off: Dow 0.4 pct, S&P 0.5 pct, Nasdaq 0.6 pct

By Julia Edwards

NEW YORK, Oct 23 (Reuters) - U.S. stocks fell on Wednesdayas shares of heavy-equipment maker Caterpillar and semiconductorcompanies tumbled after they reported earnings, ending the S&P500's four-session streak of record high finishes.

Results from Caterpillar Inc and Boeing Co,two Dow components, illustrated the quarter's mixed picture ofcorporate results and outlooks, which have some investorsworried.

Caterpillar was one of the biggest decliners on the S&P,slumping 6.2 percent to $83.62 after the manufacturer cut itsfull-year outlook for a third time and its profit missedexpectations. That sent shares tumbling by the most in a daysince September 2011.

"There's not a lot of room for error as earnings are growingat such a slow pace, particularly for a globally focused companylike Caterpillar, which has been a proxy for global GDP inglobal markets," said Erik Davidson, deputy chief investmentofficer at Wells Fargo Private Bank. "It's no secret the rest ofthe world has suffered, so therefore a company like Caterpillaris going to suffer."

On the upside, Boeing surged 5.3 percent to $129.02 afterairplane maker reported a rise in adjusted profit and raisingits full-year forecast.

After the market closed, AT&T reported revenue that was slightly below Wall Street's estimates, according to ThomsonReuters I/B/E/S.

About one-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.Investors worry that much of the growth in earnings has not beengenerated by revenue.

"Finally the markets are focused on earnings after havingbeen focused on many other things," Davidson, who called thirdquarter results released so far "tepid."

The semiconductor sector dropped 3.4 percent a dayafter Broadcom, Altera and RF Micro Devices joined Intel and Texas Instruments inlowering their forecasts.

Broadcom shares fell 2.9 percent to $26.36, Altera lost 13.5percent to $32.30 and RF Micro lost 8.6 percent to $5.63.

The Dow Jones industrial average was down 54.40points, or 0.35 percent, at 15,413.26. The Standard & Poor's 500Index was down 8.31 points, or 0.47 percent, at 1,746.36.The Nasdaq Composite Index was down 22.49 points, or0.57 percent, at 3,907.07.

The S&P 500 closed at an all-time high on Tuesday, itsfourth-straight record finish. The index is up 22 percent forthe year up to Tuesday, not far from the 23.5 percent advance in2009.

On Wednesday, 53 percent of total shares traded weredeclining.

Global equity markets weakened 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.

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.

Netflix shares were up 2.4 percent to $330.24following a large selloff on Tuesday when billionaire investorCarl Icahn cut his stake in the company.

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