NEW YORK — Stocks fell for the fourth straight day Tuesday following a profit slump at technology companies and a steep decline in oil prices, which sent energy stocks sharply lower.
The Dow Jones industrial average fell 83.17 points to close at 12,653.12. Aluminum maker Alcoa was the biggest loser in the Dow, giving up 4 percent after reporting a slump in revenue late Monday.
The broader Standard & Poor's 500 lost 10.99 points to 1,341.47. The index is in its longest slump since May 18.
Chip maker Advanced Micro Devices fell sharply after reporting that a slowdown in China and Europe led to an 11 percent drop in second-quarter revenue. The company had previously forecast a gain of 3 percent.
That news sent other technology stocks down hard. The tech-heavy Nasdaq composite dropped 1 percent, the most of the three major indexes. It closed 29.44 points lower at 2,902.33.
The bad news outweighed hopeful developments in Europe earlier in the day. Before U.S. markets opened, European finance ministers announced they had agreed on the terms of a bailout for Spain's banks. The first installment of $37 billion in aid can be ready by the end of the month.
Investors were concerned that some details seemed to be missing from the plan.
Also weighing on the market: worries about a slew of upcoming corporate earnings reports. Financial analysts expect that earnings at companies in the S&P 500 fell 2 percent in the April-through-June period compared with a year ago, according to S&P Capital IQ. That would be the first drop in nearly three years.
"The past quarter was great, but going forward many companies may have problems," said Joe Kinahan, chief derivatives strategist at TD Ameritrade, a brokerage. "People are confused about what to think."
A resolution to a labor dispute in Norway early Friday weighed on oil prices, which pushed energy stocks lower. Early Tuesday, the Norwegian government intervened to end a strike that threatened North Sea oil production.
Benchmark crude oil fell $2.08 to $83.91 a barrel in New York. Major energy companies dropped as a result, including Occidental Petroleum, down $1.95 at $83.24, and ConocoPhillips, down 90 cents at $53.43.
Natural gas producers took a hit from a sharp drop in the price of natural gas, which was down 5 percent at $2.74 per 1,000 cubic feet. Cabot Oil & Gas slumped $1.20 to $39.07 and Chesapeake Energy gave up $1.29 cents to $18.69.
Also weighing on commodities was a report from China that import growth fell in half in June from May, a signal its economy may be slowing more than expected. The Chinese economy, the world's second biggest, is growing at its slowest pace since the 2008 financial crisis.
Copper fell 1 percent to $3.40 per pound. China is a big importer of the metal.
In stocks, the selling was broad. Eight of the ten industry groups in the S&P 500 fell. Industrial companies led the declines with a slump of 1.6 percent. Utilities and consumer staples, industries that fare better than others when the economy is struggling, rose slightly.
In Europe, the deal to aid Spain helped push the yield on its benchmark 10-year government bond down to 6.8 percent. On Monday, that country's key borrowing rate surged to 7 percent, a dangerously high level. The lower yield means investors are less fearful about the country having trouble paying its debts.
Portugal, Ireland and Greece all had to ask for help from international lenders after spikes in their own borrowing rates made it unaffordable for them to raise money from selling bonds on the open market. Spain is the largest European country to date to seek international assistance.
In corporate news, Applied Materials, which makes equipment for chipmakers, cut its fiscal year profit and sales estimates because of weak demand. The stock fell 30 cents to $10.71. AMD, the chip maker hurt by slumping sales in China, plunged 63 cents to $4.99.
Embattled BlackBerry maker Research in Motion fell 38 cents to $7.29. The company's CEO, Thorsten Heins, told a shareholders meeting that he isn't satisfied with the company's performance. Two weeks ago the company announced disappointing earnings, plans to cut 30 percent of its workforce and the latest delay in BlackBerry 10.
Alcoa lost 36 cents to $8.40 after a financial analyst cut his estimate for the company's 2012 earnings. Alcoa reported Monday that it beat analyst estimate for earnings in the second quarter but that revenue dropped due to slowing world demand for aluminum.
Two stocks fell for every one that rose on the New York Stock Exchange. Volume was lighter than average at 3.4 billion shares.
Money markets are crying out for short-term liquid instruments - Financial Times
US STOCKS-More profit warnings sink Wall Street - Reuters UK
* Engine maker Cummins falls after it warns on sales
* Applied Materials, Advanced Micro also cut outlooks
* S&P 500 falls for fourth straight day
* Dow off 0.7 pct, S&P off 0.8 pct, Nasdaq down 1 pct (Updates to close)
NEW YORK, July 10 (Reuters) - U.S. stocks fell for a fourth day on Tuesday as more pessimism from U.S. companies compounded worries the sluggish world economy is taking a toll on U.S. profit growth.
A sales warning from engine maker Cummins Inc came on top of earlier weak forecasts from chipmakers Applied Materials Inc and Advanced Micro Devices, extending losses in afternoon trading.
The news sent the S&P 500 lower for a fourth consecutive day, with shares of industrials falling the most at 1.6 percent. Cummins was among the biggest losers, declining 8.9 percent to $86.91.
"It seems like the first signs indicate that earnings are going to be mediocre, and so there's not a whole lot to rely on in terms of propping up the market," said Bryant Evans, investment adviser and portfolio manager at Cozad Asset Management in Champaign, Illinois.
Recent data showing slower growth in Europe, China and the United States has weighed on the stock market, while U.S. companies have warned about overseas weakness and a stronger dollar hurting companies that rely heavily on exports.
Alcoa Inc, which kicked off the earnings period, fell 4.1 percent to $8.40 a day after it reported a quarterly loss and lower sales.
Bank stocks also declined, with the euro hitting a two-year against the dollar amid uncertainty about progress in tackling the euro zone crisis. The KBW Bank index fell 0.9 percent.
The Dow Jones industrial average was down 83.17 points, or 0.65 percent, at 12,653.12. The Standard & Poor's 500 Index was down 10.99 points, or 0.81 percent, at 1,341.47. The Nasdaq Composite Index was down 29.44 points, or 1.00 percent, at 2,902.33.
Cummins cut its full-year sales forecast, citing weakness overseas and a stronger dollar.
Advanced Micro Devices tumbled 11.2 percent to $4.99 after the chipmaker slashed its outlook for second-quarter revenue following disappointing sales in China and Europe.
Applied Materials Inc lost 2.7 percent to $10.71 after the chip-equipment maker said it expects to miss its full-year estimates and its third-quarter results will be at the low end of its previous outlook. The PHLX semiconductor index fell 2 percent.
Also, U.S.-listed shares of Research In Motion Ltd fell 5 percent to $7.29 in U.S. trading. The BlackBerry maker's shareholders elected the company's slate of directors at its annual meeting - the first presided over by new Chief Executive Thorsten Heins, who faces an uphill battle to get the embattled company back on track.
If the S&P 500 were to go below support levels, the market could see further declines, an analyst said. Among the first levels of support is the 1,340-1,345 range, according to Robert Sluymer, analyst at RBC Capital Markets in New York.
(Additional reporting By Angela Moon; Editing by Kenneth Barry)
US Stocks Tumble Amid Signals Slow Growth Will Weigh on Earnings - NASDAQ
--Stocks lower as tech, industrial companies broadcast weak future earnings
--Alcoa tumbles after Monday's earnings report
--Small business optimism falls in June to lowest reading since October
(Updates throughout with final closing prices)
By Chris Dieterich
NEW YORK--Worries from the tech and industrial sectors and an underwhelming earnings report from bellwether Alcoa combined to send stocks tumbling.
The Dow Jones Industrial Average dropped 83.17 points, or 0.7%, to 12653.12 on Tuesday. The Standard & Poor's 500- stock index fell 10.99 points, or 0.8%, to 1341.47. Both benchmarks lost ground for the fourth session in a row.
The Nasdaq Composite Index's decline was steeper following a pair of dour forecasts from microchip makers. The tech- heavy benchmark lost 29.44 points, or 1%, to 2902.33.
Advanced Micro Devices slumped fell 63 cents, or 11%, to $4.99 after the microchip maker cut its second-quarter revenue outlook late Monday, citing weaker-than-expected business conditions in China and Europe. Also weighing on tech stocks was Applied Materials, which fell 30 cents or 2.7%, to $10.71 after the firm lowered its full-year revenue guidance.
Industrial and materials stocks were the worst-performing sectors on the S&P 500, after truck-engine maker Cummins cut its full-year sales estimate below expectations, noting slowing demand in the U.S., as well as China, India and Brazil. Cummins shares declined 8.53, or 8.9%, to 86.91. Heavy-machinery maker Caterpillar also fell 2.87, or 3.5%, to 80.27.
"In general, there's still a lot of fear that earnings will disappoint," said Paul Zemsky, global head of asset allocation at ING Investment Management.
Alcoa sank 36 cents, or 4.1%, to 8.40 and was the Dow's biggest decliner after the industrial metals producer posted an earnings loss late Monday amid slumping aluminum prices. Alcoa's report, the first by a blue-chip company, unofficially kicks off earnings season.
"Last night's Alcoa earnings weren't great, and add to that a few tech warnings, and we get a slow degradation," said Robert Verderese, managing director on the trading floor at Knight Capital.
U.S. stocks initially followed European markets, which ended broadly higher after euro-zone finance ministers agreed to make billions of dollars in aid available for Spain's banking industry. The Stoxx Europe 600 added 0.8% to snap a four-session losing streak.
The blue chips rose shortly after the opening bell, but eased back in midmorning trading after Italy's Prime Minister Mario Monti reiterated that Rome won't need a bailout, but suggested that the country might need to dip into Europe's stability fund to keep its borrowing costs under control.
"The effects of good news from Europe are getting shorter and shorter," Mr. Zemsky said.
In economic news, the National Federation of Independent Business's small-business optimism index fell in June to its lowest reading since October, missing expectations.
Asian markets fell after data from China signaled slowing demand in the world's second-largest economy. China's Shanghai Composite slipped 0.3% to a six-month low, while Japan's Nikkei Stock Average lost 0.4% to suffer its fourth- consecutive decline.
On Wednesday, investors will parse the minutes from last month's meeting of the Federal Reserve's policy-making arm for hints that U.S. central bankers are ready to take additional steps to prop up the flagging U.S. economy.
Crude-oil futures shed 2.4% to settle at $83.91 a barrel, while gold futures fell 0.6% to settle at $1579.30 a troy ounce. The U.S. dollar edged higher against the euro but slipped against the yen. The yield on 10-year U.S. Treasury bonds inched lower to 1.500%.
In other corporate news, Wolverine World Wide rose 2.64, or 6.9%, to 40.97 despite reporting a 14% decline in quarterly earnings, as the shoe company's revenue edged higher and inventories fell.
Shaw Group slid 2.61, or 9.2%, to 25.78 after the technology and engineering company's quarterly loss narrowed across businesses that range from restoration of contaminated land to construction of military housing.
Helen of Troy skidded 4.59, or 13%, to 29.44 after reporting quarterly earnings that declined 4.6%, and the housewares and personal-care products company lowered its earnings guidance for the 2013.
Forest Oil stumbled 67 cents, or 9.8%, to 6.15 after the company said it plans to cut production in some regions, as it turns its focus to developing its Eagle Ford position in southern Texas.
Mako Surgical tumbled 10.60, or 43%, to 14.01 after the medical device company lowered its 2012 outlook for sales and procedures, and as analysts at Goldman Sachs lowered their stock-recommendation rating, saying they've been "too bullish."
J.C. Penney fell 1.27, or 5.8%, to 20.76 after analysts at Credit Suisse said second-quarter sales are looking worse than the 20% drop posted in the first quarter. Additionally, the department-store retailer cut 350 additional jobs on top of the 600 employees the company said it would dismiss back in April.
Write to Chris Dieterich at christopher.dieterich@dowjones.com
(END) Dow Jones Newswires 07-10-121723ET Copyright (c) 2012 Dow Jones & Company, Inc.
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