By Kate Gibson

NEW YORK (MarketWatch) -The large wave of layoffs announced on Monday gave added impetus to President Obama's call for quick action on his economic stimulus proposals but had little impact on the market, which is anticipating another 500,000 job losses this month.

"Layoffs are often a lagging indicator into what is going on with the economy. Clearly it's a sign that they (the companies shedding workers) believe the recovery is not right around the corner," said Jeffrey Kleintop, chief market strategist, LPL Financial.

Economic bellwether Caterpillar Inc. (CAT) was among those wielding the axe, with the heavy machinery giant saying it would slash 20,000 jobs during the first quarter. While Caterpillar's grim forecast had its shares slumping 7%, the shares of other companies reducing employees moved in the opposite direction.

Given that much of Caterpillar's sales are outside the U.S., the company's decision to cut its workforce signals the view that "perhaps the U.S. economy emerges out of recession by the end of this year, but the global economy may remain mired into 2010," said Kleintop.

Near midday, Caterpillar was one of six components weighing on the Dow Jones Industrial Average (DJI), which was up 98.05 points at 8,173.30. The S&P 500 (SPX) gained 13.64 points to 845.59, with energy shares leading the gains, while the Nasdaq Composite climbed 24.49 points to 1,501.78.

Sprint Nextel Corp. (US-S) and Home Depot Inc. (HD) both saw their market valuation climb, with Sprint up 3% after the telecommunications company said it would cut about 8,000 jobs, or about 14% of its workforce, in the first quarter to cut costs.

Home Depot shares gained 6.2% after the nation's biggest home improvement retailer said it would shed 7,000 workers.

And drug goliath Pfizer Inc. (PFE) said it would lose more than 8,000 employees while buying rival Wyeth (WYE) in a $68 billion deal.

"Further layoffs are indicative of the continued deterioration in the U.S. economy specifically and the global economy more broadly. I wouldn't read into anything specific from the numbers but I will say that companies are adjusting to economic weakness and addressing the source of most of their costs: labor," said Dan Greenhaus, equity strategy group, Miller Tabak & Co.

Corporations "are slimming down to adjust to lower levels of demand which will help them weather the downturn. That said, I think the continued stream of layoff announcements puts upward pressure on upcoming labor market indicators including weekly jobless claims and the employment report for January which is going to be worse than is currently expected," said Greenhaus.

Job losses came from overseas as well, with Philips Electronics (PHG), Europe's biggest consumer electronics firm, saying it would layoff 6,000 workers. It also reported its first quarterly loss in five years.

And steel giant Corus Group said it would hack 3,500 jobs around the globe, with most, or about 2,500, coming in Britain.

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