U.S. manufacturing bellwethers Caterpillar Inc and United Technologies Corp 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 ended up 4.8 percent after having risen by as much as 6.6 percent earlier in the day, and shares of Caterpillar , 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 focused 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.

Investors were cheered by his comments and sent shares higher.

First-quarter sales were down 30 percent sequentially, but the gross margin rose, said Alex Blanton, an analyst at Ingalls & Snyder. And they did that even as they reduced inventories, maintained the dividend and increased cash. That's remarkable.

UNITED TECH SEES BETTER 2010

Diversified manufacturer United Technologies, meanwhile, reported a 28 percent drop in first-quarter profit as a slumping economy crimped demand for its jet engines and air conditioners.

But the Hartford, Connecticut-based company, which also makes Black Hawk helicopters and Otis elevators, seemed to hold out hope that demand would begin to stabilize in the second half.

The company expects to return to profit growth next year, Chief Financial Officer Greg Hayes told analysts on a conference call.

United Tech said order trends were weak in the first quarter. But it said the rate of the year-over-year decline had stabilized across most of its businesses in March and it stood by its full-year forecast.

Profit at the company's Carrier air-conditioner unit -- which closely tracks construction activity -- tumbled 91 percent in the quarter on a 27 percent drop in revenue. That made it United Tech's weakest segment in the quarter.

The company seems to be managing the downturn better than expected, wrote Merrill Lynch analyst Ronald Epstein in a note to clients. Although Carrier's results are disappointing, we expect they have reached a bottom and should begin to improve.

SMALLER PRODUCERS

Two other smaller industrial players also reported on Tuesday. Pentair Inc
, which released its numbers before the opening bell, and Terex Corp , which reported after the closing bell.

Pentair, which makes products including water filtration systems and electrical enclosures, cut its profit forecast for the rest of the year, with Chief Executive Randall Hogan citing dismal conditions in its key markets.

The Minneapolis-based company said it now expects to earn at least $1.40 a share this year. In February it said it expected $1.70 to $2.00 per share.

We believe our first-quarter earnings -- and the sales decline that drove it -- represents a low point for the company, Hogan said.

Its shares fell 5 percent to $22.19 on the NYSE.

After the bell, Terex posted a far larger loss than Wall Street had expected.

The world's third-largest maker of construction and mining equipment, said it swung to a quarterly loss as charges associated with the company's restructuring weighed on a business already reeling from the worldwide economic slowdown.

Terex said it lost $74.9 million, or 79 cents a share, in the first quarter. During the comparable quarter last year, Terex reported a profit of $163.3 million, or $1.59 per share.

Terex shares, which were up 7 percent during regular trade, were indicated slightly lower following the results.

(Editing by Patrick Fitzgibbons, Dave Zimmerman and Steve Orlofsky)