Stocks were little changed on Friday as a profit miss from Caterpillar and disappointing sales from Microsoft offset strong earnings from GE and McDonald's and a new deal to help Greece.

Caterpillar Inc fell 7 percent to $103.82 after its second-quarter profit missed estimates and said the U.S. recovery was weaker than expected.

Microsoft Corp posted a greater-than-expected jump in fourth-quarter profit but sales at its core Windows product fell. The Dow component added 0.6 percent to $26.26.

General Electric Co rose 0.4 percent to $19.25 after it reported a 21.6 percent jump in quarterly, beating expectations. McDonald's Corp's profit also topped estimates, sending the stock up 3.1 percent to $89.20.

Overall this earnings season is strong, and GE especially looked good overall, but you can never ignore what Caterpillar says, said Sal Catrini, managing director for equities at Cantor Fitzgerald & Co in New York.

Caterpillar tellingly spoke of an uncertain business environment, which shouldn't be a surprise, but it is weighing on the stock, and on Deere.

Deere & Co lost 2.1 percent to $80.58 while Joy Global Inc was off 2.1 percent to $98.30.

Caterpillar is seen as a barometer of economic activity by investors, and the stock was the best performing Dow component of 2010. On Friday, it was the index's top drag.

The Dow Jones industrial average <.DJI> was down 11.81 points, or 0.09 percent, at 12,712.60. The Standard & Poor's 500 Index <.SPX> was up 0.94 points, or 0.07 percent, at 1,344.74. The Nasdaq Composite Index <.IXIC> was up 10.39 points, or 0.37 percent, at 2,844.82.

Euro zone leaders agreed on a second rescue package for Greece that could trigger a temporary default and would give a financial rescue fund broader powers to try to prevent a spread of market instability.

Worries that euro-zone debt contagion could reach regions where U.S. banks have more exposure have pressured equities in recent weeks.

Verizon Communications Inc swung to a second-quarter profit that beat expectations and named a new chief executive officer. The stock dropped 3 percent to $36.48.

Equities have also been pressured by the drawn-out wrangling on a deal to raise the U.S. debt ceiling. U.S. President Barack Obama and top lawmakers grappled to reach a sweeping deficit-reduction deal.

(Editing by Jeffrey Benkoe)

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