NEW YORK (AP) -- The stock market drifted lower Tuesday, giving up early gains.
The Dow Jones industrial average lost 16 points to 13,542 as of 1:30 EDT. Caterpillar tugged the Dow down, losing 3 percent. The world's largest maker of bulldozers and other heavy equipment said late Monday that slower economic growth around the world dampened its earnings forecast. Its stock sank $2.70 to $88.17.
Encouraging economic reports gave the stock market a nudge in morning trading. House prices rose in major cities for a third straight month, and a gauge of consumer confidence came in surprisingly high.
More surprising than those two economic reports was the Richmond Federal Reserve's strong reading on regional manufacturing, a recent trouble spot, said Phil Orlando, chief equity strategist at Federated Investors.
"Look at that. There were three data points on the economy and we crushed them," said Phil Orlando, chief equity strategist at Federated Investors.
But sagging profits could drag on the stock market in the coming weeks, Orlando said. Caterpillar joined a growing collection of companies have lowered their earnings forecasts. FedEx, a bellwether of world trade, said that shipping has sunk to recession-like levels. Railroad giant Norfolk Southern has also warned that falling shipments and sinking coal prices will likely drag down its earnings.
Wall Street analysts now estimate that corporate profits will sink this quarter from a year earlier. That would be the first such drop in three years.
In other Tuesday trading, the Standard & Poor's 500 index slipped two points to 1,454. The Nasdaq composite index dropped five points to 3,155. Google's stock touched an all-time high in early trading, clearing $764.
Carnival Corp. jumped 1 percent after the cruise-ship company posted better earnings than analysts had expected Tuesday morning. Its stock rose 56 cents to $37.56.
The closely watched Standard & Poor's/Case Shiller index of national house prices increased 1.2 percent in July compared with the same month in 2011. Prices rose from the previous month in all 20 major cities tracked by the report for the third month in a row.
The Conference Board said its gauge of consumer confidence shot to a seven-month high in September, trumping forecasts by a large margin. People surveyed said they were more optimistic about the job market.
The Federal Reserve's manufacturing index, which surveys companies in the central Atlantic region, increased after shrinking for three months as businesses turned more optimistic. Companies said they anticipate more orders and shipments even as employment dips. The index turned positive in September after a negative reading in August.
All three major stock indexes have surged or more this month, buoyed by a new plan from the Federal Reserve to support the U.S. economy. Both the Dow and the S&P 500, the benchmark for most stock funds, have gained more than 3 percent.
Treasury prices were little changed after the first of three bond auctions this week. The government sold $35 billion in two-year notes at 0.27 percent. The 10-year Treasury yield, the benchmark for mortgages and other loans, dipped to 1.70 percent.