Equipment Type

CM Stock Index Rises Above Troubled Markets

Continued weakness in housing and crumbling credit markets combined with high oil prices to create a vice grip for both consumers and companies as our quarter ended Dec. 31, 2007. Even an uptick in existing home ...

February 11, 2008

Continued weakness in housing and crumbling credit markets combined with high oil prices to create a vice grip for both consumers and companies as our quarter ended Dec. 31, 2007. Even an uptick in existing home sales reported the day our session ended did little to improve Wall Street's grim mood.

The Fed lowered interest rates a quarter point at the end of October and again in December as homeowners and the credit sector alike struggled to find firm ground in a shrinking lending market. Even employment numbers — the hope of the economic rebound — were a disappointment at year's end.

"We've seen the return of volatility," said Scott Fullman, director of investment strategy for I.A. Englander & Co. "I think that will be around for a while and will govern trading for the new year. Stock selection and strategy will play a very important part in the success of anybody who is trading going into the new year. This is not a time where you throw a dart at the board."

Despite a downturn in the major markets at the end of 2007, the Construction Magazine Index turned in a decidedly positive quarter, adding 170.92 points, or 6.20 percent, to end at 2925.95. However, declining issues outpaced advancing issues at a 21-to-9 count. Volatility was the watchword in the index as there were several high gainers and losers when the dust settled at session's end.

Deere jumped ahead this quarter as its overseas segments registered positive results due to the weak dollar. Deere reported fourth-quarter net income of $422.1 million, or $1.88 per share, compared to net income of $277.3 million, or $1.20 per share earned in last year's comparable quarter. The results blew past analysts' expectations: Those polled by Thomson Financial were expecting earnings of $1.55 per share. Strong demand for Deere equipment worldwide offset weakness in the company's construction and forestry segments in the U.S.

"We believe the construction and forestry equipment segment will remain under pressure in 2008, but strong agriculture fundamentals should translate into another year of high-teens sales growth for the agricultural equipment business," said Morningstar analyst John Kearney.

Deere was upgraded by Banc of America Securities analyst Seth Weber to "buy" from "neutral." Deere increased 18.91 points, or 25.48 percent, and was the top dollar and percentage gainer this session. Deere closedat 93.12.

Terex faltered this session as its third quarter came in below analysts' expectations. Terex earned $151.5 million, or $1.45 per share, compared to net income of $101 million, or $1 per share. Revenues rose to $2.2 billion, a 16-percent increase from last year's $1.9 billion. However, analysts surveyed by Thomson Financial expected earnings of $1.47 per share and sales of $2.21 billion. Terex slid 23.45 points, or 26.34 percent, and closed at 65.57. Terex was the top dollar loser.

Shares of U.S. Concrete shed 3.26 points, or 49.47 percent, this quarter and the company was the top percentage loser in the index. Revenues were flat for its third quarter, which dropped to $10 million, or $0.26 per share, from net income of $11.2 million, or $0.29 per share. Revenues inched down to $250 million, just 0.1 percent lower than last year's results. RMIX's exposure to the U.S. residential market is higher than other suppliers, thus leading to a Citi downgrade to "sell" from "hold." Citi Investment Research analyst Stephen Trent lowered his price target to $4 from $7.

"Although we hold out the possibility that U.S. cement prices could increase in the first quarter of 2008, we see risk to US Concrete's materials," Trent said, alluding to RMIX's difficulty in passing their higher costs to end customers. U.S. Concrete closed at 3.33.

Exchange TickerSymbol Company Name Price 12/31/2007 Price 9/28/2007 Net Change Percent Change 52-Week High 52-Week Low Shares Outstanding Market ($000) Capitalization
NYSE AKS AK Steel Holding Corp. 46.24 43.95 2.29 5.21% 53.97 16.13 111500 5155760
NYSE ASH Ashland, Inc. (APAC) 47.43 60.21 -12.78 -21.23% 70.20 45.79 71770 3404051.1
NYSE CAT Caterpillar, Inc. 72.56 78.43 -5.87 -7.48% 87.00 57.98 680210 49356037.6
NYSE CTX Centex Corp. 25.26 26.57 -1.31 -4.93% 56.45 17.77 127750 3226965
NYSE CVX Chevron Corp. 93.33 93.58 -0.25 -0.27% 95.50 64.99 2240000 209059200
NYSE CNH CNH Global NV 65.82 60.74 5.08 8.36% 68.11 25.80 236800 15586176
NYSE CMI Cummins, Inc. 127.37 127.89 -0.52 -0.41% 143.45 56.32 102130 13008298.1
NYSE DAI DaimlerChrysler AG (Freightliner) 95.63 100.20 -4.57 -4.56% 111.65 59.65 1030000 98498900
NYSE DE Deere and Co. 93.12 74.21 18.91 25.48% 93.74 45.12 438050 40791216
NYSE DHI D.R. Horton, Inc. 13.17 12.81 0.36 2.81% 31.13 10.15 314960 4148023.2
NYSE EXP Eagle Materials, Inc. 35.48 35.74 -0.26 -0.73% 52.16 33.81 44040 1562539.2
NYSE XOM Exxon Mobil Corp. 93.69 92.56 1.13 1.22% 95.27 69.02 6220000 582751800
NYSE FLR Fluor Corp. 145.72 143.98 1.74 1.21% 172.15 75.22 88430 12886019.6
NYSE GT Goodyear Tire & Rubber Co. 28.22 30.41 -2.19 -7.20% 36.90 21.40 211230 5960910.6
NYSE GVA Granite Construction Ltd. 36.18 53.02 -16.84 -31.76% 74.62 32.46 41920 1516665.6
NYSE HAL Halliburton Co. 37.91 38.40 -0.49 -1.28% 41.95 27.65 881150 33404396.5
NYSE IR Ingersoll-Rand Company Ltd. 46.47 54.47 -8.00 -14.69% 56.66 38.25 330830 15373670.1
NYSE KUB Kubota Corp. 33.60 40.86 -7.26 -17.77% 53.83 35.82 263140 8841504
NYSE VMC Legacy Vulcan Corp. 79.09 89.15 -10.06 -11.28% 128.62 77.04 101830 8053734.7
NYSE MTW Manitowoc Company, Inc. 48.83 44.28 4.55 10.28% 51.49 25.67 129830 6339598.9
NYSE MLM Martin Marietta Materials, Inc. 132.60 133.55 -0.95 -0.71% 170.25 98.91 46360 6147336
NYSE OSK Oshkosh Truck Corp. 47.26 61.97 -14.71 -23.74% 65.83 44.85 74210 3507164.6
NASD PCAR Paccar, Inc. 54.48 56.83 -2.35 -4.14% 65.76 42.16 368330 20066618.4
NYSE PHM Pulte Homes 10.54 13.61 -3.07 -22.56% 35.56 8.78 258470 2724273.8
NYSE SGR Shaw Group, Inc. 60.44 58.10 2.34 4.03% 77.30 28.60 81730 4939761.2
NYSE TEX Terex Corp. 65.57 89.02 -23.45 -26.34% 96.94 54.75 102600 6727482
NYSE WFC Wells Fargo & Co. 30.19 35.62 -5.43 -15.24% 37.99 29.29 3350000 101136500
NYSE X United States Steel Corp. 120.91 105.94 14.97 14.13% 127.26 68.83 118120 14281889.2
NASD RMIX US Concrete, Inc. 3.33 6.59 -3.26 -49.47% 9.48 3.21 39230 130635.9
NYSE USG USG Corp. 35.79 37.55 -1.76 -4.69% 58.74 34.69 99040 3544641.6
Source: Trade Trends, Inc. (509) 327-1279

Note: CIT Group was removed from the index and Wells Fargo was added to the index.
Deere had a 2:1 stock split effective 12-4-07.
Paccar had a 3:1 stock split effective 10-10-07.
Volvo was delisted from the NASDAQ on 12-13-07, and was removed from the index.
Vulcan Materials changed its name to Legacy Vulcan Corp. It still trades on the NYSE under the ticker VMC.

Price 12/31/2007 Price 9/28/2007 Net Change Percent Change
Construction Index 2925.94 2755.02 170.92 6.20%
Dow Jones Industrial Average 13264.82 13895.63 -630.81 -4.54%
S&P 500 Index 1468.36 1526.75 -58.39 -3.82%
NASDAQ Composite 2652.28 2701.50 -49.22 -1.82%
Top Gainers and Losers
$ Gainer Deere and Co. 18.91
$ Loser Terex Corp. -23.45
% Gainer Deere and Co. 25.48%
% Loser US Concrete, Inc. -49.47%
Advancers 9
Decliners 21

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