Stocks slumped on Tuesday after European finance ministers cancelled a summit originally scheduled for Wednesday, key U.S. companies missed earnings expectations and the latest economic snapshots showed ongoing problems.
The Dow Jones industrial average closed at 11,706.62, down 207.00 points or 1.7 per cent -- ending a three-day winning streak. The broader S&P 500 closed at 1229.05, down 25.14 points or 2 per cent. In Canada, the S&P/TSX composite index closed at 12,109.75, down 52.53 points or 0.4 per cent.
The losses were widespread, with 28 of the 30 stocks within the Dow ending the day in negative territory. However, economically sensitive stocks led the declines after U.S. home prices fell in August and a reading of U.S. consumer confidence hit its lowest level in two years.
Against this backdrop, hopes that Europe would provide a clear solution to the euro-zone sovereign-debt crisis on Wednesday were challenged: While authorities insist that Wednesday’s deadline will be met, finance ministers won’t be meeting ahead of time to work on some of the details. However, a summit of European leaders will go ahead as planned.
Meanwhile, 3M Co. fell 6.3 per cent after it reported a 1 per cent decline in its quarterly earnings over last year. The company also warned of the challenging business environment and cut its forecasts for 2011 full-year earnings.
Amazon.com Inc. also disappointing with its quarterly earnings report, released after markets closed. The online retailer and tablet maker reported earnings of just 14 cents a share, well below analysts’ expectations. The shares fell 4.4 per cent during regular trading hours and were down sharply in after hours trading.
This follows a disappointing outlook from Netflix Inc. on Monday after market closed, sending its shares skidding 34.9 per cent on Tuesday.
In Canada, Canadian Pacific Railway Ltd. fell 0.5 per cent after its quarterly earnings fell slightly from last year. As well, Royal Bank of Canada fell 0.8 per cent and Suncor Energy Inc. fell 1.4 per cent. However, gold producers rallied after gold rose to a one-month high of $1,700.40 (U.S.) an ounce, up $48.10. Barrick Gold Corp. rose 3.4 per cent.