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Caterpillar is trading at 10,322, up 19% since the firm announced better-than-expected EPS and revenue for the fourth-quarter of 2013; the EPS and revenue were $1.54 and $14.4 billion respectively. Caterpillar manufactures heavy machinery for the construction and mining sectors, and the boost in the construction sector has offset the slight drop in demand from the mining sector.
Caterpillar reduced its staff by over 10,000 last year, as a part of its cost-cutting scheme. The company’s outlook for 2014 was cautiously optimistic, but it is not expecting major sales from mining as the resources sector has been hit by soft metal prices.
Year to date, the S&P 500 is up 0.4% while Caterpillar is up 13%. If the results do not meet expectations we could see the share price drift towards the 50-day moving average of 9810. If the results are strong we could head towards the 11,000 mark, not seen since March 2012.