Stocks extended losses by late morning Tuesday after a reading on China's factory activity disappointed and sparked fears over the global economic growth. 

The S&P 500 was down 1.2%, the Dow Jones Industrial Average fell 1.1%, and the Nasdaq slid 1.3%. The Nasdaq is down for the eighth time in nine sessions, while the S&P 500 and Dow are down for the third time in four. 

An unofficial reading on factory activity in China fell further into contraction in April, cementing concerns over the health of the world's second-largest economy. The Markit and Caixin Media survey saw activity fall to 49.4 in April from 49.7 in March, declining further below 50, the level separating expansion from contraction. This is the 14th straight month in contraction.

A change in policy from the Reserve Bank of Australia also triggered fears over the health of the global economy. The central bank cut rates for the first time in a year as its economy faces record-low inflation and a stronger U.S. dollar that pressured demand for its oil, basic materials and other local products internationally. Its cash rate target was cut to a new low of 1.75%. The chances of a rate cut were over 50%.

Crude oil was also sharply lower for a second day ahead of weekly inventory data that will be released after the closing bell. Oil has pulled back as fears over a supply glut and growing production returned after a surge of nearly 20% in April. West Texas Intermediate was down 2.8% to $43.55 a barrel.

The auto industry was on watch on Tuesday as sales for April were released throughout the day. Carmakers appeared to rebound from weakness in March, extending the record level of sales achieved a year earlier.

Ford (F) was lower after reporting a 12% decline in car sales, offset slightly by a nearly 15% surge in truck sales. Overall sales in the U.S. rose 4% to 231,316 units. However, analysts had expected a far-stronger 6.5% gain in sales. 

Fiat Chrysler (FCAU) enjoyed its strongest April in 11 years as sales of SUVs and pickup trucks spiked. Overall unit sales jumped 6%, in line with analysts' estimates, driven by a 12% increase in truck sales. 

General Motors  (GM) didn't fare quite as well, reporting a 3.5% decline in overall sales compared to an expected 3% drop. Cadillac was its worst-performing brand, seeing sales slump nearly 30%. 

American International Group (AIG) fell 1.9% after swinging to a first-quarter loss. The insurance giant suffered from a poor performance in hedge funds and other market-sensitive investments. This marked the third straight quarter in which AIG's hedge fund investments endured losses.

UBS (UBS) slid 7.3% as weakness in its wealth-management and investment businesses contributed to a sharp decline in quarterly net profit. The Swiss bank reported net profit of 707 million Swiss francs, down from 1.98 billion francs a year earlier. Analysts had expected net profit of 1.02 billion francs. The bank blamed "negative market performance [and] substantial volatility" for its underperformance.

Pfizer (PFE) added nearly 4% after besting first-quarter estimates and boosting its full-year outlook. The drugmaker expects fiscal 2016 earnings of at least $2.38 a share, up from a previous range of $2.20 to $2.30 a share. Pfizer earned 67 cents a share in its recent quarter, 13 cents above consensus.

CVS Health (CVS) beat quarterly expectations, while providing upbeat fiscal 2016 guidance. The pharmacy chain reported first-quarter adjusted earnings of $1.18 a share, 2 cents above estimates, while revenue surged nearly 19% to $43.2 billion thanks to two acquisitions last year. CVS expects adjusted earnings between $5.73 and $5.88 a share for the full year, meeting forecasts of $5.82.

Sprint (S) climbed 1.4% after reporting a mixed quarter. A fourth-quarter net loss of 14 cents a share was nearly double the loss analysts had expected. Revenue fell from a year earlier to $8.07 billion but topped estimates of $8.02 billion.

Biogen (BIIB) was on watch after announcing plans to spin off its haemophilia business into a separate publiclybtraded company. The biotech company plans to complete the spinoff by the end of the year at the earliest. Biogen will continue to manufacture key drugs Eloctate and Alprolix, which are housed in the haemophilia business, for around three to five years.

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Aeropostale (ARO) shares were on watch on reports the teen retailer is preparing to file for bankruptcy protection this week. The company could seek Chapter 11 protection within days, as well as detail plans to close more than 100 of its approximate 800 locations, The Wall Street Journal reported.