Caterpillar and Under Armour benefit from Chinese growth

U.S. stocks ended the session little changed Monday as investors grappled with rising bond yields and a mixed bag of earnings reports.

The closely watched yield on the 10-year Treasury note climbed, settling just below the psychologically important 3% level.

The Dow Jones index closed less than 0.1%, lower at 24,448.69 while S&P 500 index rose 0.01% with six of its 11 main sectors finishing in positive territory.

The Nasdaq Composite Index COMP, -0.25% shed 17.52 points, or 0.3%, to 7,128.60.

Caterpillar reacts positively to fears of trade-war

Analyst upgraded Caterpillar shares to buy from neutral on Monday, saying the industrial giant will benefit from improvements in the Chinese construction sector.

China has historically been a big buyer of Caterpillar construction machinery. The analyst also pointed to positive estimate revisions and increased capital returns as reasons for the upgrade.

Fears of a trade war following the Trump administration’s announcement of tariffs have weighed on Caterpillar’s stock, since the company derived 59% of its 2017 revenue from outside the U.S.

The company warned in its 2017 annual report that “a government’s adoption of ‘buy national’ policies or retaliation by another government against such policies could have a negative impact on our results of operations.”

But some analysts believe the market has overreacted to the trade headlines, given recent evidence suggesting improvement in the company’s mining and construction businesses, and progress with its restructuring initiatives. However, the stock could struggle if there is a slowdown in the global economy.

Caterpillar shares rose 1.5 percent in the premarket Monday to $155 a share.

Under Armour shares jumped after upgrade by analysts

Under Armour shares jumped Monday after they have been upgraded from sell to hold by analysts. Shares of the sportswear retailer surged 4.5 percent following the analyst's note.

"First-quarter and fiscal year 2018 earnings are attainable in our view, reflecting improved sell-through of new products and a commitment to cost reduction” analysts said on Monday.

While in North America the wholesale continue to face pressure, the international growth remains robust especially in China where the government is investing in Physical education, athletic facilities and sport leagues should jump-start the country's athletic apparel market, the analyst said.

The analyst increased his price target to $16 from $13, implying little change from Friday's closing price of $16.10 over the next 12 months.