U.S. bellwethers show pressures

By James B. Kelleher and Scott Malone

CHICAGO/BOSTON (Reuters) - U.S. manufacturing bellwethers Caterpillar and United Technologies reported on Tuesday that falling global demand for their big-ticket products battered first-quarter results.

But the companies also suggested that if business conditions aren't exactly getting better they aren't getting worse either -- offering twin glimmers of hope to investors searching for signs of a rebound.

On Wall Street, shares of United Technologies (UTX.N) ended up 4.8 percent after having risen by as much as 6.6 percent earlier in the day, and shares of Caterpillar (CAT.N), which fell sharply after its results were released, rallied to close 3 percent higher.

Caterpillar, the world's largest maker of mining and construction equipment, reported its first loss since 1992, pulled into the red by costs associated with a recession-triggered restructuring that has so far resulted in the elimination of 25,000 jobs.

The company, which also makes turbines and diesel engines, slashed its full-year forecast, warning that sales this year could decline the most since the 1930s.

Even so, Caterpillar managed to sound upbeat. During a call, executives focussed attention on how swiftly the company had reacted to the downturn -- and how much better key financial metrics were performing than in previous downturns.

Caterpillar Chairman and Chief Executive Jim Owens gave an encouraging first peek into the company's second-quarter performance. "April was the first month since last fall that our near-term sales and operation planning did not result in a drop in the year-ahead forecast," he said on the call.

"We're certainly not out of the woods yet. But there's reason for some optimism."