Earnings at Caterpillar, the maker of tractors and other heavy equipment, tumbled 21 percent in the second quarter, the company said, a much steeper decline than had been expected.  The slump in housing, which has weakened demand for Caterpillar's construction equipment, was among the reasons cited by the company.

 The surprising shortfall, on top of Google's earnings miss, will weigh heavily on the stock market today. Caterpillar is seen as an indicator of the economic cycle, and while analysts had been expecting the company's growth to slow, they were not anticipating it to slow as much as it did in the second quarter.

Shares of Caterpillar are down 8 percent in early trading. 

Caterpillar's chief executive, Jim Owens, said the earnings were "disappointing' and attributed the decline to "the sharp negative swing in on-highway truck engine profitability, weakness in North American machine sales, continued selected supply chain disruptions and higher material costs."

Still, revenue climbed 7.1 percent in the quarter, to $11.4 billion. That gain came largely from sales overseas, offsetting the weakness in North America.