Goldman lowers Cat's rating to 'sell'

Caterpillar Inc., the world's largest maker of backhoes and excavators, fell 5.9 percent in early New York trading after a Goldman, Sachs & Co. analyst lowered his rating on the stock to "sell" from "neutral."

Caterpillar, based in Peoria, Illinois, declined $2.50 to $39.70 at 8:26 a.m., before the opening of the New York Stock Exchange. Shares dropped 3.4 percent yesterday.

President-elect Barack Obama's infrastructure spending plan may not offer enough of a boost to offset declining global demand and rising costs, Goldman's Terry Darling wrote in a note today.

Caterpillar faces "global cyclical headwinds that the U.S. stimulus will likely not be able to surmount," Darling wrote in a note to investors today. "The majority of the infrastructure spending will not come until 2010."

The company gets about two-thirds of its revenue from machinery including construction and road-building equipment.