Benchmarks suffered heavy losses on Tuesday following weak quarterly results from DuPont and United Technologies. Meanwhile, the Dow suffered its biggest decline since June 21. Also, more blue-chip companies slashed their forecasts for the rest of this year. The energy and material sectors were the biggest losers among the S&P 500 industry group.
The Dow Jones Industrial Average (DJI) tumbled 1.8% to close the day at 13,102.53. The Standard & Poor 500 (S&P 500) lost 1.4% to finish yesterday’s trading session at 1,413.11. The tech-laden Nasdaq Composite Index dropped 0.9% to end at 2,990.46. The fear-gauge CBOE Volatility Index (VIX) surged 13.3% to settle at 18.83. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.6 billion shares, marginally higher than this year’s daily average of 6.52 billion shares. The decliners on the New York Stock Exchange outpaced advancing stocks; as for 43% stocks that gained, 53% stocks closed lower.
The Street had a bearish sentiment from the very beginning of yesterday’s trading session after a couple of dismal earnings reports. The Dow registered its worst day in nearly four months and had fallen as much as 262 points during late afternoon. This is the Dow’s third sharpest decline this year. Dismal corporate earnings and sluggish global economic conditions hampered the investors’ sentiment.
Meanwhile, E I Du Pont De Nemours And Co (NYSE:DD) tumbled 9.1% after the company reported lower-than-expected profits. The company also announced 1,500 job cuts in an effort to decrease its cost. Du Pont also slashed its outlook on Tuesday, citing weak global demand of paint pigment and solar cells. This is Du Pont’s biggest drop in almost four years.
Du Pont’s weak earnings dragged the material sector in the red and the Materials Select Sector SPDR fell 3.0%. Stocks such as The Dow Chemical Company (NYSE:DOW), Rockwood Holdings, Inc. (NYSE:ROC), Eastman Chemical Company (NYSE:EMN), PPG Industries, Inc. (NYSE:PPG) and Huntsman Corporation (NYSE:HUN) tumbled 4.5%, 3.6%, 3.4%, 1.8%, 6.1%, respectively.
The day was dominated by disappointing earnings from most of the sectors. United Technologies Corporation (NYSE:UTX) and 3M Co (NYSE:MMM) posted their quarterly reports, which came in below the estimates. United Technologies slashed its sales forecast for the year due to weak demand from airlines and sluggish global economic conditions. 3M also cut its outlook, citing recession in Europe and slow growth in Asia hampering the sales. The shares of United Technologies and 3M fell 1.0% and 4.1%, respectively.
The energy sector had a bad run, as oil prices dropped to their lowest level in three months. The Energy Select Sector SPDR lost 2.4% and was the major loser. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Marathon Oil Corporation (NYSE:MRO), BP plc (NYSE:BP), Chevron Corporation (NYSE:CVX) and Petroleo Brasileiro Petrobras SA (NYSE:PBR) tumbled 2.2%, 1.8%, 2.9%, 3.0% and 3.8%, respectively.
Amidst a batch of disappointing earnings, the street had couple of good earnings reports also. Yahoo! Inc. (NASDAQ:YHOO) jumped to hit a 52-week high after beating the street estimates easily. Meanwhile, Harley-Davidson, Inc. (NYSE:HOG) surged 7.7% after posting its quarterly results.