Stocks Drop, Cat Misses on Earnings

U.S. stocks began lower on Wednesday, pressured by weak results from Caterpillar Inc (CAT) and amid concern over tightening financial conditions in China and weakness in European banks. The Dow Jones Industrial Average lately slid 61.78 points, or 0.40%, to 15,405.88. The S&P 500 lost 8.69 points, or 0.50%, to 1,745.98. The Nasdaq Composite declined 27.35 points, or 0.70%, to 3,902.22.

Caterpillar Inc.’s (CAT) third-quarter earnings fell 44% as weak demand for mining equipment continued to weigh on results. For the latest quarter, Caterpillar reported a profit of $946 million, or $1.45 a share, down from $1.7 billion, or $2.54 a share, a year earlier. Revenue declined 18% to $13.42 billion.

Boeing Co.’s (BA) third-quarter earnings rose 12% as strength in its commercial aircraft business offset weaker profits at its defense division. In the latest quarter, the commercial aircraft business reported revenue growth of 15% as deliveries increased 14% to 170 planes. Operating earnings climbed 40% as margins strengthened.

European Central Bank said it will begin a thorough review of the balance sheets of 130 financial institutions in the euro zone in November, to unearth potential risks before moving closer to a banking union for the region. As part of the asset-review exercise, the ECB will ask these banks to set aside 8% of their risk-adjusted capital as a buffer against losses on loans and other parts of their balance sheets.

After a bruising defeat over Obamacare in the government shutdown, Republicans hope to regain momentum by exposing how President Barack Obama’s administration ran aground trying to launch his signature healthcare reform law.

Entrepreneurs and start-up companies looking for backing will be able to solicit small investments over the Internet from the general public under a new proposal to be released by U.S. regulators on Wednesday.