Stocks sought direction at midday as corporate earnings reports continued to come in while economic data were mixed.
Pending home sales in the United States dropped by 4.3% in December from November, though the reading remained above 100. The index was 6.9% higher from the same time last year, and the index has risen year over year for 20 straight months. However, the most recent reading countered the expected 1% increase, and the November reading was revised downward, leading to some concerns about the housing recovery. Also in construction-related news, building permits for last month were revised up by 1% from November.
In a better sign for economic growth, durable-goods orders increased by 4.6% in December from the previous month, with defense goods leading the charge with an 110.4% monthly gain. The overall results exceeded expectations.
Separately, the Federal Reserve Bank of Chicago reported a 0.7% December gain for its Midwest Manufacturing Index, while the Dallas Fed posted a monthly increase for its January business activity index.
Stocks on the Move
Caterpillar (CAT) fourth-quarter earnings fell by 55% year over year to $1.04 per share, which was below expectations as the firm took on an acquisition-related charge. The firm also offered a lower EPS forecast for the year, but Morningstar analysts are encouraged by Cat's strong reputation and perceived product advantage. Shares were up by 2.1% at midday.
Biogen Idec (BIIB) posted a slight drop in fourth-quarter net income, though shares were up by 3.1% at midday as management remains optimistic about regulatory approval for its multiple sclerosis drug.
Kevin O'Shaughnessy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.