Gloomy economic picture fuels risk aversion… Financials, energy, retailers among top drags… Dow off 4.3 pct, S&P 500 off 5 pct, Nasdaq off 5.3 pct

U.S. stocks tumbled on Monday as signs of further deterioration in the economy around the world punctured last week’s market enthusiasm, with financial services companies and retailers among Wall Street’s biggest drags.

Major industrial companies also contributed to losses on signs global demand is faltering, leading investors to pare back risk in favor of safe-haven government debt.

With the holiday shopping season under way, investors feared that retailers may turn in their bleakest sales in many years. The S&P retail index declined 4.4 percent.

Department store Macy’s Inc tumbled 9.6 percent.

Consumers made repeat trips to stores and spent more on bargains this weekend, but analysts said the rush is unlikely to translate into a much-needed boost in profit.

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Our outlook for the machinery sector is increasingly one of caution. We are beginning to see U.S economic weakness and the credit crunch negatively impact international markets.

Japan's machine orders have fallen for two consecutive months, with a huge 14.5% decline in August. China Petroleum & Chemical Corp., or Sinopec (SNP) plans to cut its oil imports for the fourth quarter of 2008, which portends of slower manufacturing activity ahead.

As foreign economies deal with weaker exports to the U.S and Europe, industrial customers are cutting back on capital spending. Equipment orders are decelerating in almost every end market -- from machines used in construction, infrastructure, agriculture and base metal projects.

Over the next 6-12 months, we believe the biggest potential problem area is global construction spending. Investors should realize the conditions that created the U.S. housing crisis existed in various markets outside the U.S. Excess liquidity and easy money played

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Our outlook for the machinery sector is increasingly one of caution. We are beginning to see U.S economic weakness and the credit crunch negatively impact international markets.Japan's machine orders have fallen for two consecutive months, with a huge 14.5% decline in August. China's Sinopec (SNP) plans to cut its oil imports for the fourth quarter of 2008, which portends of slower manufacturing activity ahead.As foreign economies deal with weaker exports to the U.S and Europe, industrial customers are cutting back on capital spending. Equipment orders are decelerating in almost every end market -- from machines used in construction, infrastructure, agriculture and base metal projects.Over the next 6-12 months, we believe the biggest potential problem area is global construction spending. Investors should realize the conditions that created the U.S housing crisis existed in various markets outside the U.S. Excess liquidity and easy money

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Chicago the most populous city of Illinois is also home to the world’s second busiest airport, Chicago O’Hare. But this state’s economy does not depend on any particular city or industry. Read on to find out more:1. Illinois is the top producer of nuclear power in the country.2. The state offers several tax incentive programs for companies relocating to Illinois.3. Almost 12,000 manufacturing firms are headquartered in the state, and together they operate 19,000 plants within the state.4. The most important industries in Illinois are: food, chemicals machinery, and fabricated metals.5. Over 2,000 banks and 1,000 savings institutions are headquartered in Illinois.6. The agricultural industry produces more than $8 billion in income.7. Illinois is the number one producer of soybeans and a top producer of corn.8. More than 6,000 trucking companies call Illinois home.9. ...

In this feature, we turn our attention to General Motors (GM), Johnson & Johnson (JNJ), Wal-Mart (WMT), Chevron (CVX) and Home Depot (HD).

One of the hallmarks of this bear market has been how indiscriminate it has been.  Companies that are likely to be absolutely devastated by the economic slowdown are getting whacked almost as much as those that should do just fine.  To illustrate this, one needs go no further than the Dow 30.

Below we present the 30 blue chips sorted by how much they have declined over the last year.  All but one of them is down.  Yes, two of the firms that are likely to suffer the most are at the top of the list, General Motors (GM) and Citigroup (C).  However, the relative positions of many of the others simply

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Caterpillar Inc. (NYSE:CAT) shares have  fallen 18% over the past 3 months, now hovering in the $65 range.  They managed to pay out a 42 cent dividend in July despite the world economy falling apart.  The company continues to say things are great and they are on course for record sales this year thanks to China and other emerging countries.  So why doesn't the Street care? Caterpillar raised its full-year earnings guidance in July as strong growth in emerging countries offset the impact of rising commodity prices and weakness in economies in North America, Western Europe and Japan. Last month CEO Jim Owens said he did not expect the U.S. housing market to pick up substantially until 2010. But he said Caterpillar was struggling in China to meet a backlog of orders. Despite what Owens says about how great his company is ...

Caterpillar Inc. (CAT) reported second quarter EPS of $1.74, above our expectations of $1.52, due to a lower share count, increased price realization and higher international sales volume. The company remains committed to capacity expansion in growth markets outside the U.S., which positions CAT to increase share in mining and energy-related equipment.

Our FY08 EPS estimate of $6.41 -- which is above the management guidance -- assumes 30% revenue growth in the Middle East, Asia Pacific and Latin America, no growth in North America, and a share count of 608 million. Our target price is $75.50.

A recovery is expected in FY08 in U.S. coal market due to the recent rebound in coal prices and increasing coal exports. Outside North America, metal mine production increased in most regions led by higher prices. Thus, with prices of most commodities higher globally, demand for CAT equipment remains extremely strong.

In June, CAT announced

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