U.S. stocks drop on Europe, corporate outlook
NEW YORK (MarketWatch) -- U.S. stocks fell for a fourth session Tuesday as the U.S. dollar advanced on uncertainty over Europe, and engine maker
"Industrials are getting hammered here," said Jack Ablin, chief investment officer at Harris Private Bank, who chalked up the intensified losses to Cummins's reduced outlook.
The Dow Jones Industrial Average
shed 83.17 points, or 0.7%, to 12,653.12, led by a 4.1% drop in
The S&P 500 index (SPX) fell 10.99 points, or 0.8%, to 1,341.47, weighed by industrials and materials sectors. Both the Dow and S&P 500 have fallen for four straight sessions.
Cummins (CMI) shares dropped 8.9%, the second-worst performer on the S&P 500, after the maker of natural-gas engines forecast flat revenue this year, instead of a prior forecast of 10% growth. It blamed a slowdown in the global economy. Read more on Cummins.
"Cummins is a natural-gas story, they convert all those engines to natural gas. Because oil has come down so much so quickly, that incremental cost of switching from diesel to natural gas, that cost advantage has gotten compressed," Ablin said.
Concern about technology earnings also weighed on investor sentiment.
The Nasdaq Composite (COMP) shed 29.44 points, or 1%, to 2,902.33, its third session in the red.
Decliners outpaced advancers by a 2-to-1 ratio on the New York Stock Exchange, where 728 million shares traded. NYSE composite volume was about 3.4 billion.
The dollar (DXY) rose against other global currencies including the euro, against which it hit a two-year high, after a German court and Italy's prime minister added to uncertainty about the euro zone's bailout fund. Read more on currencies.
"One of the things we're fighting against in the near term is the firming dollar, we've seen that have two effects, commodity prices go down and unfortunately stock prices do as well," said Art Hogan, a managing director at Lazard Capital Markets.
"Close to 20% of the S&P 500 are directly related to commodity prices," Hogan said.
Oil for August delivery (CLQ2) fell 2.4% to $83.91 a barrel after Norway intervened to halt a labor dispute that threatened its North Sea production and China released economic data illustrating a roughly 6% rise in June imports, down from the prior month and less than analysts expected. Read more on oil futures.
U.S. stocks had started the session higher after European leaders moved to bolster Spain's banks, saying they would provide as much as 100 billion euros ($123 billion) in rescue loans to protect one of the euro area's larger economies.