NEW YORK: US stocks tumbled Tuesday as disappointing Alcoa results sharpened concerns about the just-underway third-quarter earnings season.
Alcoa slumped 11.4 percent missing earnings-per-share expectations and offering a lackluster forecast for its value-added aluminum businesses, which will be renamed “Arconic” when the company splits in two on November 1.
The market is “very cautious” on earnings after five straight quarters in which the S&P 500 reported declining profits, said David Levy portfolio manager at Republic Wealth Advisors.
Analysts also cited lower oil prices and higher government bond yields as concerns.
The Dow Jones Industrial Average dropped 1.1 percent to 18,128.66.
The broad-based S&P 500 shed 1.2 percent to 2,136.73, while the tech-rich Nasdaq Composite Index sank 1.5 percent to 5,246.79.
Amazon lost 1.3 percent following a report that the online retailer plans grocery shops that would let people quickly pick up milk, vegetables or other perishable foods.
Petroleum producers Apache and ConocoPhillips both lost more than two percent on lower oil prices.
General Electric bucked the negative tide, rising 0.3 percent after announcing it would acquire Denmark’s LM Wind Power, which makes blades for wind turbines, for $1.7 billion.
Apple also advanced, climbing 0.3 percent on expectations of a bump to iPhone sales after rival Samsung Electronics scrapped production of its Note 7 smartphones following problems with exploding batteries.
Illumina, a research company focused on genetic analysis, plunged 24.8 percent after cutting its third-quarter revenue forecast to $607 million from the previous range of $625-630 million due to lower demand for genetic sequencing instruments.
Medical equipment supplier St. Jude Medical dropped 3.5 percent following a warning about battery risks in defibrillator patients. The company said a premature depleting of the battery can leave patients vulnerable. The failure has been tied to two fatalities, according to Bloomberg.
Abbott Laboratories, which has agreed to acquire St. Jude for $25 billion, fell 5.4 percent.
