Stocks sank on Wednesday after Alcoa Inc. began the third-quarter earnings season with a disappointing report, raising concerns about corporate earnings amid a slowing global economy.
The Dow Jones industrial average closed at 13,344.97, down 128.56 points or 1 per cent. The broader S&P 500 closed at 1432.56, down 8.92 points or 0.6 per cent – marking the fourth straight decline for the benchmark U.S. index. In Canada, the S&P/TSX composite index closed at 12,212.42, down 61.15 points or 0.5 per cent.
Alcoa Inc. fell 4.6 per cent after it reported quarterly results on Tuesday evening after markets closed. While the company’s adjusted earnings – which exclude special items – beat analysts’ expectations, Alcoa lowered its outlook for 2012 given the slowdown in China.
Chevron Corp. fell 4.2 per cent after the energy producer warned that its earnings would be hurt by hurricane activity and foreign exchange losses.
However, the gloom did not affect all corners of the market. Yum Brands Inc. jumped 7.5 per cent after the fast-food company reported that its earnings rose 19 per cent on a per share basis.
Costco Wholesale Corp. rose 1.9 per cent after it reported earnings of $1.39 (U.S.) per share, up from $1.08 last year, topping expectations.
FedEx Corp. rose 5.2 per cent after it announced a plan to slash costs and boost earnings by $1.7-billion over the next three years.
Commodity prices were mixed. Crude oil fell to $91.25 a barrel, down $1.14. Gold rose slightly to $1,765.10 an ounce, up 10 cents. Among Canadian commodity producers, Suncor Energy Inc. fell 1.2 per cent and Barrick Gold Corp. fell 0.5 per cent.
However, AuRico Gold Inc. jumped 21.4 per cent after it announced the sale of its Ocampo mine in Mexico for $750-million.