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Tickers in this Article: CNH, DXPE, EXP, JOY, GTLS, CAT, BEAV
The Nasdaq has climbed 1%, the S&P 500 is up 0.5% and the Dow has risen 0.6% on a good day for the market so far. The capital goods sector is the category of stocks related to the manufacture or distribution of goods. The sector is diverse, containing companies that manufacture machinery used to create capital goods, electrical equipment, aerospace and defense, engineering and construction projects. It is also referred to as the "industrials sector". Performance in the capital goods sector is sensitive to fluctuations in the business cycle. Because it relies heavily on manufacturing, the sector does well when the economy is booming or expanding. As economic conditions worsen, the demand for capital goods drops off, usually lowering the prices of stocks in the sector.

The Capital Goods sector (XLI) is up 0.4%, underperforming the market overall. The biggest movers in the sector are currently:
CompanyMarket CapPercentage Change
CNH Global NV (ADR) (NYSE:CNH)$9.3 billion+4.6%
DXP Enterprises, Inc. (Nasdaq:DXPE)$640.5 million+3.4%
Eagle Materials, Inc. (NYSE:EXP)$1.72 billion+3.1%
Joy Global Inc. (NYSE:JOY)$5.35 billion+2.9%
Chart Industries, Inc. (Nasdaq:GTLS)$1.98 billion+2.4%
Caterpillar (NYSE:CAT)$55.46 billion+2.2%
BE Aerospace, Inc. (Nasdaq:BEAV)$4 billion-2.1%
Broker Summary: E-Trade Financial

Rising 4.6%, CNH Global NV (NYSE:CNH) is currently trading at $40.58 per share. So far today, the company's volume is 158,982 shares. If a stock price moves on high volume, this means that the change is a significant one. A company's investment value can be estimated using valuation ratios such as the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). Relative to the industry P/E ratio of 11.95, CNH's 8.6 is low. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: How To Find P/E And PEG Ratios

Increasing 3.4%, DXP Enterprises (Nasdaq:DXPE) is trading at $46.75 per share. At 32,100 shares, the company's volume so far today is 0.4 times the current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. A company's value as an investment is more easily estimated using valuation ratios such as the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield. The debt ratio is calculated by dividing total liabilities by total assets. The debt ratio for DXPE is 60.1%, which is relatively high. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Eagle Materials (NYSE:EXP) has moved up 3.1% and is currently trading at $39.25 per share. So far today, the company's volume is 144,884 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. EXP has a high P/S ratio of 3.16. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.

After rising 2.9%, Joy Global (NYSE:JOY) is currently trading at a share price of $52.04. The company's volume for the day so far is 443,693 shares, 0.2 times its average over the past three months. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. The capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. JOY has a capitalization ratio of 40.1%. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.

After an increase of 2.4%, Chart Industries (Nasdaq:GTLS) has reached a current price of $67.93. So far today, 111,797 shares of the company's stock have changed hands. At this rate, trading activity will likely be down from yesterday when 698,407 shares changed hands. A stock's volume conveys how excited investors are about it. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. The debt-equity (D/E) ratio is a leverage ratio. The debt-equity ratio of 37% is relatively low. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.

Caterpillar (NYSE:CAT) has increased to a share price of $86.85, a 2.2% rise. At 2.9 million shares, the company's volume so far today is 0.3 times the average daily volume. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. CAT's PEG ratio of 0.54 is in line with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

BE Aerospace (Nasdaq:BEAV) is currently trading at a share price of $37.72, a 2.1% decline. The company's volume for the day so far is 879,400 shares. The trading volume for a stock indicates the level of investor interest. A wide array of ratios can be used by investors to estimate the attractiveness of a potential or existing investment and get an idea of its valuation. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. BEAV's P/B ratio of 2.0 shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Daily stock performance should be weighed against historical performance and put in context of the market overall. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.

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