Stocks fell sharply on Tuesday after a disappointing round of earnings underlined the tough operating environment for companies right now as the global economy struggles.
The Dow Jones industrial average closed at 13,102.53, down 243.36 points or 1.8 per cent. The broader S&P 500 closed at 1413.11, down 20.71 points or 1.4 per cent – bringing the total loss over the past four trading days to about 47 points. In Canada, the S&P/TSX composite index closed at 12,225.84, down 177.70 points or 1.4 per cent.
The gloom surrounded Europe, too, where Spain’s central bank said that the country’s falling tax revenues could wreak havoc on its deficit targets. The U.K.’s FTSE 100 fell 1.4 per cent and Germany’s DAX index fell 2.1 per cent.
In the United States, DuPont reported a 98 per cent dip in its third-quarter earnings over last year and lowered its outlook for the full year. The shares fell 9.1 per cent.
3M Co. fell 4.1 per cent after its quarterly revenues missed analysts’ expectations and the company cut its full-year forecast.
However, United Parcel Service Inc. rose 3 per cent after it met estimates. But the parcel delivery company reported lower-than-expected revenue and warned of a slower growth environment.
Apple Inc. fell 3.3 per cent after it unveiled a slew of new technology gadgets – including a smaller version of its popular iPad tablet – at a press event. The new iPad had been widely anticipated.
After market closed, Netflix Inc. reported disappointing subscriber numbers with earnings and revenues missing expectations. The shares rose 0.5 per cent during regular trading hours but fell 17 per cent in after hours trading.
Facebook Inc. also released results after the market closed, reporting sales of nearly $1.3-billion, up 32 per cent over last year and topping estimates. Earnings, after excluding one-time items, rose to a profit of 12 cents a share, beating expectations of 11 cents a share. The shares are up nearly 10 per cent in post-market trading.
The market declines were exceptionally broad near the start of the trading day, at one point affecting 97 per cent of stocks within the S&P 500. However, the selloff grew less broad as the day progressed. By the end of the day, just over 87 per cent of stocks declined.
Commodities were hammered. Crude oil fell to $86.62 (U.S.) a barrel, down $2.11 and touching a three-month low. Gold fell to $1,709.40 an ounce, down $16.90 and hitting its lowest level in more than five weeks.
Among Canadian commodity producers, Suncor Energy Inc. fell 2.2 per cent and Barrick Gold Corp. fell 1 per cent.
It was a busy day for Canada’s Big Banks. Royal Bank of Canada fell 2.8 per cent after it announced a deal to buy the Canadian auto finance and deposit business of Ally Financial Inc.
Toronto-Dominion Bank fell 1 per cent after it announced a deal to buy retailer Target Corp.’s U.S. Visa and private label credit card portfolio.