NEW YORK (
) -- U.S. stocks markets fell the most in a month Tuesday as
(IBM - Get Report)
Deere & Company
(DE - Get Report)
were downgraded and
American Eagle Outfitters
(AEO - Get Report)
cut its earnings outlook.
dropped 0.6% to close at 1,697.37 while the
Dow Jones Industrial Average
also declined 0.6% to 15,518.74. The
lost 0.7% to 3,665.77.
"On the whole, we would say the data continues to paint a picture of an economy that is exhibiting gradual and grudging improvements," Russ Koesterich, Blackrock's chief investment strategist in New York, said in a note. "That said, however, we believe investors are likely to witness more volatility when we get into the fall. In our view, September is likely to provide three challenges for equity markets."
Koesterich said that among those challenges is that September is a month when the calendar has "traditionally mattered" -- and it has historically been the worst month for stock prices.
"Overall, we still believe that equity valuations are reasonable and that prices can continue to advance over the next year, but we would also advocate a more defensive posture going into the fall."
Deere lost 1.9% to $81.20 after
analysts cut their view on the stock to "underperform" from "market perform" citing deteriorating fundamentals for U.S. farmers in the coming years.
IBM fell 2.3% to $190.99 as Credit Suisse downgraded the
shares to underperform.
In explaining their downgrade, Credit Suisse cited concerns about IBM's future "organic" growth, free cash flow and software revenue.
tumbled 3.9% to $13.28 after falling as low as $12.65 as small vendors selling to the retailer reportedly had problems getting credit.
J.C. Penney Survival Guide
American Eagle plummeted 12% to $17.57 after the teenage and young adults clothing company reduced its current-quarter earnings guidance to 10 cents a share from last year's 21 cents due to weaker than expected sales and margin results.
Written by Andrea Tse in New York
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