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Stocks close mixed after Caterpillar issues weak earnings report, forecast

NEW YORK - Wall Street ended a record-setting week narrowly mixed Friday, with the Dow Jones industrials falling to close inches above 12,000 after a lackluster profit report and forecast from Caterpillar Inc. prompted many investors to retreat. The Dow was up for the week, but broader market indicators were mixed.

Caterpillar, one of the 30 blue chip stocks that comprise the Dow, unnerved investors who have bet that the slowing economy would pull off a soft landing rather than tip into recession.

''Caterpillar must have taken about 60 to 70 points off the Dow,'' said Stephen Carl, head of equity trading at The Williams Capital Group.

It was optimism about the economy and rising hopes for strong third-quarter earnings that had lifted the Dow into uncharted territory this week. The blue chip index, reaching its first 1,000-point milestone in 71⁄2 years, traded past 12,000 for the first time Wednesday and had its first close above that mark on Thursday.

The Dow closed down 9.36, or 0.08 percent, at 12,002.37.

Broader stock indicators showed modest gains after spending much of the session with losses. The Standard & Poor's 500 index was up 1.64, or 0.12 percent, at 1,368.60, and the Nasdaq composite index rose 1.36, or 0.06 percent, to 2,342.30 following a strong showing by Google Inc.

The Dow rose 0.35 percent for the week, while the S&P gained 0.22 percent and the Nasdaq fell 0.64 percent. The Dow had shown triple-digit point gains in each of the previous three weeks. Despite the overall gains in the market, the S&P stands about 10.4 percent below its high close of 1,527.46 and the Nasdaq is even further off, about 54 percent.