Stocks drop following results from Caterpillar and Google

NEW YORK -- Wall Street pulled back Friday, retreating from record levels following disappointing results from longtime favorites Caterpillar Inc. and Google Inc. The Dow Jones industrials fell nearly 150 points.

The drop in stocks came a day after the Dow finished above 14,000 for the first time and the Standard & Poor's 500 index likewise logged a record close. While a retrenchment might not be surprising following weeks of somewhat volatile trading and the big gains Thursday, Caterpillar has been one of the best-performers among the 30 stocks that make up the Dow and a big contributor in the blue chips' march to 14,000. The heavy equipment maker unnerved investors when its results came in well below expectations.

Jitters over subprime lending also weighed on the stock market, and led investors to buy up safer Treasury bonds instead. As Treasury prices rose, the benchmark 10-year note's yield dropped below 5 percent.

Technology shares also took a hit after a strong run Thursday. Google turned in a second-quarter profit that fell short of Wall Street's high expectations, while Microsoft Corp.'s earnings report wasn't impressive enough to alleviate investors' concerns about the sector.

"As people start to absorb the numbers and start to see the second-quarter numbers aren't good as the first quarter, that starts to create some pullback a bit," said Nick Raich, director of research at National City Private Client Group.

According to preliminary calculations, the Dow fell 149.33, or 1.07 percent, to 13,851.08. The index earlier declined by as many as 200 points.

Broader stock indicators also lost ground. The S&P 500 index fell 18.99, or 1.22 percent, to 1,534.09. The Nasdaq composite index fell 32.44, or 1.19 percent, to 2,687.60.