Caterpillar Inc | featured news

Caterpillar Inc, the world's largest maker of construction equipment, posted a 55 percent drop in quarterly profit on Monday due to a charge connected with accounting fraud at a Chinese subsidiary and weak demand among its dealers.

Caterpillar drove the Dow Jones industrial average higher Friday after the company reported a huge gain in first-quarter earnings. The world's largest maker of mining and construction equipment rose 2.5 percent after its earnings increased more than five-fold. The company also raised its sales and profit forecast for the year.

The economy won out over earnings season Wednesday, when a round of mostly better-than-expected reports couldn't stop a triple-digit slide in the Dow Jones industrial average.

U.S. stocks edged higher, bolstered by U.S. Federal Reserve Chairman Ben Bernanke's comments that the economy is unlikely to slide into a second recession, but worries about European finances persisted after Fitch Ratings warned that the U.K. faces budget challenges.

Rising oil and metals prices boosted the materials and energy sectors, including shares of Alcoa and Caterpillar. Ford opened at its highest price in five years.

Caterpillar, the world's largest maker of construction and mining equipment, says it will permanently cut 2,500 jobs.

CHICAGO (Reuters) - Caterpillar Inc said on Monday that quarterly earnings fell more than 32 percent and warned of a tough year ahead as the downturn that began in the United States metastasized into a full-blown global recession that hit sales of its earth-moving equipment.