NEW YORK (AP) â¿¿ Nobody was expecting this earnings season to be great. But investors didn't expect the bad news from corporate bellwethers to be this bad, either.
Stocks plunged Tuesday, making it one of the worst days on Wall Street so far this year and sending the major indexes to their lowest levels since early September. Big-name companies reported weak quarterly earnings and lowered their forecasts for the rest of the year.
The Dow sank 253 points, or almost 2 percent, to 13,093 in midday trading. The Dow's biggest decline so far this year was 274 points. That was June 1, the day the government released an ominously weak jobs report.Other indexes also fell sharply. The Standard & Poor's 500 index fell 23 points to 1,411 and the Nasdaq composite index was off 33 points at 2,983. The Nasdaq hasn't closed below 3,000 since Aug. 6. Companies of all stripes signaled that the economy is far from healed, and that demand isn't what it was a year ago. DuPont, 3M, UPS and Xerox all missed analysts' expectations for revenue. Because of their global footprint and variety of products and services, those companies augur how the world economy is performing. Their revenue is important because consumer spending drives more than 70 percent of the U.S. economy. The Federal Reserve has been trying to drive the economy by keeping interest rates low, but the earnings season has cast doubt on whether the strategy is working. The unemployment rate was 7.8 percent as of September, slightly lower than previous months but still far above the rate that signals full employment. Chemical maker DuPont said it will have to cut jobs and other expenses after sales fell throughout the world. 3M, which makes all manner of products including Scotch tape and coatings for LCD screens, cut its profit predictions for the year.