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.
