A Strange Friday

The week ended on a strange note, with the Dow dropping about 1/2%, while the broader S&P 500 gained slightly. The culprit? Caterpillar. Wall Street doesn't like negative surprises, so when Caterpillar announced earnings that missed, it was punished. This cyclical company is usually one to watch to see if we are expanding or contracting, so this news gave me pause. As I dug further into the problem, I could see that much of this was blamed on capacity problems (more of a management problem) and materials costs (inflation, of course). This gave me reassurance that we weren't heading into a contraction. Also, NASDAQ gained about 2/3% today, buoyed by Google, et.al., on the tech side. All in all, a strange day. Dow -65.88 NASDAQ +14.10 S&P 500 + 1.79