Can Caterpillar Keep Up?

As the largest maker of construction and mining equipment on the planet, Caterpillar (NYSE:CAT) is often used as a bellwether not just for the industry, but for the economy at large. This may seem a bit heavy-handed for a company with a market capitalization of just $63.17 billion — Apple (NASDAQ:AAPL) basically sweat this company’s market value off overnight — but Caterpillar sells products that drive industries, which drive economies.

So, when Caterpillar reports that machine sales dropped for the first time in over two and a half years, a shiver of uncertainty passes through the markets. According to the company’s report (which is unaudited, for what it’s worth), global machine sales fell 1 percent in the fourth quarter. This is highlighted by a 7 percent drop in Asia, and a 6 percent drop in North America.

Such information is cause for concern for a number of obvious reasons. Economic indicators have been struggling to remain positive and turn market sentiment around. Unemployment claims are down, the housing recovery is developing (with a few bumps), GDP will hopefully tick upwards, and if we’re lucky, in a generation this whole global financial disaster will be confined to textbooks and bar talk. Not to over-dramatize the significance of Caterpillar’s sales dip, but it’s hard not to assign a lot of weight to the results. Shares are up nearly 8 percent since the start of the year, riding high on economic happy-talk and strong expectations…