|Wall Street slumps on weak outlooks from DuPont, UTX|
|Tuesday, 23 October 2012 15:57|
Stocks fell on Tuesday, putting the Dow industrials on track for the biggest drop since June 21, after a series of weak quarterly results from bellwether companies.
Multinationals including DuPont (DD.N) and United Technologies (UTX.N) fell short of Wall Street's revenue expectations, amplifying worries about the health of the global economy.
DuPont's stock lost 8.8 percent to $45.39 after the chemical company reported lower-than-expected quarterly profit and announced 1,500 job cuts. The stock was responsible for a 33-point drag on the Dow, which was down more than 220 points.
The S&P materials sector index .GSPM was down 2.8 percent, largely on account of DuPont's performance.
"The market has gone from taking a macro view focused on E.U. and China to focusing on earnings, and the earnings are disappointing," said Timothy Hoyle, director of research for Haverford Investments in Randor, Pennsylvania.
"We expected earnings to be flat to down a few percent, but we did not anticipate the fact that the third quarter got progressively weaker for many companies."
A total of 145 of the S&P 500 .SPX companies have reported results so far. Sixty-three percent have missed analysts' expectations for revenue. By contrast, since 1994 an average of 62 percent of companies have exceeded estimates. Over the past four quarters 55 percent of companies have beaten.
The Nasdaq pared losses as Apple (AAPL.O) cut some of its losses after Chief Executive Tim Cook announced the computer and cellphone company was launching a smaller, cheaper tablet.
Apple Inc unveiled an 8-inch tablet, competing in a market staked out by Amazon.com Inc (AMZN.O) and Google Inc (GOOG.O). Apple slipped 0.9 percent to $629.76.
Elevator and air conditioner manufacturer United Technologies Corp slipped 0.4 percent to $77.55 after its third-quarter earnings fell 3.3 percent.
Overall earnings for S&P 500 companies are expected to fall 2.5 percent in the third quarter from a year ago, Thomson Reuters data showed.
The Dow Jones industrial average .DJI was down 216.88 points, or 1.63 percent, at 13,129.01. The Standard & Poor's 500 Index .SPX was down 18.17 points, or 1.27 percent, at 1,415.65. The Nasdaq Composite Index .IXIC was down 13.86 points, or 0.46 percent, at 3,003.10.
In a development reviving investors' worry about Europe, Moody's downgraded five key Spanish regions by one or two notches late on Monday, citing their limited cash reserves and forthcoming bond repayments.
The S&P 500 was below its 50-day moving average of about 1,434, which had been a level of support and may now act as resistance if the market is able to rebound.
A total of 33 S&P 500 companies were scheduled to report earnings on Tuesday, including Netflix (NFLX.O) and Facebook (FB.O) after the close.