NEW YORK (AP) — Disappointing earnings outlooks from big-name companies drove the stock market lower Tuesday afternoon as investors worried about future profit growth.
KEEPING SCORE: The Dow Jones industrial average was down 291 points, or 1.7 percent, to 17,387 as of 1:08 p.m. Eastern time. The blue-chip average dropped as much as 390 points earlier. The Standard & Poor's 500 shed 23 points, or 1.2 percent, to 2,033. The Nasdaq composite slid 68 points, or 1.4 percent, to 4,703.
THE QUOTE: "A lot of today's sell-off is looking forward, saying, once again earnings expectations are being lowered," said JJ Kinahan, TD Ameritrade's chief strategist. "All we've done is lower earnings expectations the last year and a half."
SECTOR VIEW: Nine of the 10 sectors in the S&P 500 fell, with technology stocks dropping the most. Utility stocks, where investors go when they're looking for safety, were the only industry group to rise.
PC PROBLEMS: Microsoft shares tumbled a day after the company's noted in its latest quarterly results that licensing revenue for its Windows operating system fell 13 percent due in part to weak PC sales in China and Japan. Management also warned that a strong dollar will dent revenue by 4 percent in its fiscal third quarter. Microsoft shares slid $4.15, or 8.8 percent, to $42.84.
ROUGH QUARTER: Caterpillar's stock fell 7.5 percent after the heavy equipment maker was hurt in the fourth quarter by restructuring costs and issued a weak outlook. The stock shed $6.43 to $79.60.
ECONOMIC WORRIES: The Commerce Department reported that orders for long-lasting manufactured goods dropped 3.4 percent in December, dragged lower by a big decline in demand for commercial aircraft. There was also weakness in a number of areas, with demand for machinery, computer and primary metals all down. Economists had been forecasting a small increase for December.
HOUSING REPORTS: Separate reports shed light on the housing market Tuesday. The Standard & Poor's/Case-Shiller 20-city home price index showed that U.S. home prices rose at a modest pace in November, held back by weaker sales and a limited number of available houses. Meanwhile, the Commerce Department reported that sales of new U.S. homes accelerated 11.6 percent last month, a sign that home sales may improve after a lackluster 2014.
CURRENCY PAIN: Procter & Gamble fell 3.8 percent as the strong U.S. dollar cut into the consumer products maker's second-quarter earnings. The company said that exchange rates will remain a challenge well into fiscal 2015, especially in the second half of its year. The stock slid $3.38 to $86.20.
ABOVE THE REST: Lower fuel prices and steady demand for travel pushed American Airlines Group's earnings to a record high in the fourth quarter. CEO Doug Parker said Tuesday that 2015 is shaping up as another strong year. Even so, the company said that a key revenue figure would decline in the first quarter. That sent shares down $1.83, or 3.3 percent, to $53.67.
EUROPEAN MARKETS: France's CAC 40 fell 1.1 percent, while Germany's DAX was off 1.6 percent. Investors were still weighing the implications of Sunday's election victory by Greece's Syriza party, which has vowed to end painful austerity policies that are a condition of the country's international bailout program.
ENERGY: Benchmark U.S. crude rose 86 cents to $46.01 a barrel. Oil has plunged since June, when it traded above $100, on high supplies and weak growth in demand.
BONDS: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 1.80 percent from 1.83 late Monday.
– by AP Reporter Alex Veiga
