US STOCKS-Wall St climbs on Caterpillar; Apple shines late

                                
  
                                
 * Caterpillar sees tough Q3, but stock lifts Dow
                                
 * Apple jumps after-hours after profit beats views
                                
 * Fed Chairman Bernanke cautious about economy
                                
 * Dow up 0.8 pct; S&P 500 and Nasdaq each up 0.4 pct
                                
 * For up-to-the-minute market news click [STXNEWS/US]
 (Adds Apple's results after the bell and volume figures)
                                
 By Ellis Mnyandu
                                
 NEW YORK, July 21 (Reuters) - U.S. stocks rose on Tuesday
as a solid profit from Caterpillar Inc <CAT.N> overcame some
uneasiness about the company's outlook for the current
quarter, but the gains were limited as some investors paused
following the recent earnings-fueled run-up.
                                
 Trading was choppy, with the broader market initially
charging higher after the open and the benchmark S&P 500
<.SPX> hitting a fresh 2009 intraday high as it extended its
rebound from the 12-year closing low of early March.
                                
 A late push helped the Nasdaq eke out a small gain for its
10th straight winning session, the longest in 12 years.
                                
 With Apple Inc <AAPL.O>, the maker of the iPhone, posting
a stronger-than-expected profit after the bell and its stock
rising 3.4 percent in late trade, Wednesday could be another
banner day for the Nasdaq.
                                
 Drugmaker Merck & Co <MRK.N>, a Dow component, was among
bellwethers with encouraging profit reports on Tuesday.
                                
 But that profit optimism collided with a dose of reality
as heavy equipment maker Caterpillar, another Dow component,
warned the current quarter could be tough.
                                
 In addition, U.S. Federal Reserve Chairman Ben Bernanke
said in testimony before a congressional panel that mounting
joblessness, slumping home values and tight credit were likely
to curb consumer spending -- a major driver of U.S. economic
growth and corporate profits. For details, see
[ID:nN21221058]
                                
 "People can get a bit euphoric with a couple of positive
economic numbers and earnings ... but you're going to have to
see how this pans out over the long term," said Stephen Carl,
principal and head of U.S. equity trading at The Williams
Capital Group in New York.
                                
 "I think you do a little profit-taking now, go through the
summer and see how the rest of second-quarter earnings come
out, and then kind of ascertain what's going on after that."
                                
 The Dow Jones industrial average <.DJI> gained 67.79
points, or 0.77 percent, to 8,915.94. The Standard & Poor's
500 Index <.SPX> rose 3.45 points, or 0.36 percent, to 954.58.
The Nasdaq Composite Index <.IXIC> added 6.91 points, or 0.36
percent, to 1,916.20 -- a closing high for the year.
                                
 FROM MARCH LOW, S&P JUMPS 41 PCT
                                
 The S&P 500 is now up 41 percent from the 12-year closing
low of March 9.
                                
 Shares of Caterpillar, up 7.8 percent at $39.46, provided
the Dow's top boost, but finished below the day's high after
the company said it expected the third quarter to be the
year's weakest and "extremely challenging." [ID:nN21229028]
                                
 Merck said second-quarter earnings fell, hurt by lower
sales of its cholesterol drugs, but income from partnerships
and a rebound in sales of asthma drug Singulair helped the
drugmaker beat profit forecasts. The stock, up 6.1 percent at
$29.65, ranked as the Dow's second-biggest advancer. The
pharmaceuticals index <.DRG> was up 1.6 percent.
                                
 But shares of United Technologies Corp <UTX.N> , a
diversified manufacturer, fell 1.8 percent to $53.97 after it
posted a 23 percent drop in profit and lowered its 2009
outlook. [ID:nN2066672]
                                
 On Nasdaq, shares of iPod and iPhone maker Apple Inc
<AAPL.O> were the top drag, falling 0.9 percent to $151.60
ahead of its quarterly results. After the bell, Apple posted a
quarterly profit that topped forecasts, driving its stock up
more than 3 percent to $156.72. [ID:nN20471555]
                                
 CIT SINKS BELOW $1
                                
 Troubled lender CIT Group Inc <CIT.N> warned on Tuesday it
could still file for bankruptcy if debt swap failed, one day
after securing $3 billion in emergency financing from its
bondholders. [ID:nN21223385] Its stock sank 21.6 percent to
end at 98 cents on the New York Stock Exchange.
                                
 Also on the defensive were shares of Regions Financial
Corp <RF.N> and Comerica Inc <CMA.N>, two large U.S. regional
banking companies. Both posted second-quarter losses as a
deteriorating commercial property market caused bad loans to
soar. [ID:nN21224122] Regions' stock slid 15.4 percent to
$3.42. Comerica's stock lost 10.1 percent to $20.51.
                                
 In regulatory news, the U.S Treasury Department sent to
Congress a draft bill that would curb the power of credit
ratings agencies. [ID:nN21241707]
                                
 Moody's Corp <MCO.N> shares dropped 6.3 percent to $26.80,
and shares of McGraw-Hill Cos <MHP.N>, which owns Standard &
Poor's, fell 1.5 percent to $32.55.
                                
 Volume was moderate on the New York Stock Exchange, with
1.21 billion shares changing hands, below last year's
estimated daily average of 1.49 billion. On the Nasdaq, about
2.28 billion shares traded, matching last year's daily
average.
                                
 Advancing stocks outnumbered declining ones on the NYSE by
a ratio of about 8 to 7, while on the Nasdaq, the opposite
trend prevailed: About five stocks fell on Nasdaq for every
three that rose.
  (Editing by Jan Paschal)