Caterpillar slumped after the maker of mining and construction equipment said its third-quarter earnings plunged. The company cut its earnings forecast again. The stock dropped $4.67, or 5.2 percent, to $84.49.
Boeing jumped after raising its profit estimate for the full year as deliveries of commercial planes continue to accelerate. The plane maker’s stock climbed $5.29, or 4.3 percent, to $127.79.
The S&P 500 index fell back after surging 6 percent over the previous two weeks. The index climbed as lawmakers inched toward a deal to end a 16-day partial government shutdown and avert a potential U.S. default. Investors also became more convinced that the Federal Reserve will refrain from easing back on its economic stimulus until possibly next year.
“We need to let a little bit of air out of the balloon here,” said Alec Young, a global equity strategist at S&P Capital IQ. “We’ve seen a huge rally, so there’s a bit of short-term-exhaustion.”
The S&P 500 dropped 9 points, or 0.5 percent, to 1,745, as of 12:04 p.m. The index is on track for its first down day in six.
Energy stocks dropped the most as the price of oil fell to its lowest in almost four months. Oil slipped $1.23, or 1.3 percent, to $97.01 a barrel.
The Dow Jones industrial average fell 57 points, or 0.4 percent, to 15,407. The Nasdaq composite dropped 28 points, or 0.6 percent, to 3,900.
Many analysts and economists expect the Fed to refrain from easing its stimulus until next year to help the economy maintain its momentum after the government shutdown. The central bank is currently buying $85 billion in bonds every month to keep interest rates low. That stimulus program has underpinned a 4½ year rally in stocks.
While some earnings disappointed investors Wednesday, most are doing better than expected. About 60 percent of the companies in the S&P 500 that have reported third-quarter earnings have beaten analysts’ forecasts, according to data from S&P Capital IQ.
“Obviously we’ve had one casualty today with Caterpillar but, so far, most companies have beaten market expectations,” said Peter Cardillo, chief market economist at Rockwell Global Capital.
S&P 500 companies are expected to report earnings growth of 3.5 percent for the July-to-September quarter over the same period a year earlier. Revenue is expected to rise by 3.9 percent.
In government bond trading, the yield on the 10-year note fell to 2.48 percent from 2.51 percent late Tuesday. The yield is at its lowest since mid-July.
In commodities, the price of gold fell $7.60, or 0.6 percent, to $1,335.20 an ounce.
Among other stocks making big moves:
• Corning surged $1.82, or 11.7 percent, to $17.17 after the company announced a new tie-up with a Samsung Electronics subsidiary that will boost the glass maker’s earnings immediately; and
• Safeway rose $2.25, or 6.8 percent, to $35.13 following a report from Reuters late yesterday that “a handful” of buyout firms, including Cerberus Capital Management, are exploring a deal for all, or part, of the supermarket chain.
— Broadcom fell $1.20, or 4.4 percent, to $25.93. The communications chip maker reported adjusted results that exceeded Wall Street expectations, but the company’s earnings forecast disappointed investors.