NEW YORK (AP) — Warnings of weaker profits helped pull the stock market down on Tuesday, despite some positive economic news.
The Standard & Poor’s 500 index had its biggest drop since June 24. The S&P lost 9.77 points, or 0.6 percent, to 1,697.37. All 10 sectors in the S&P 500 fell.
The Dow Jones industrial average fell 93.39 points, or 0.6 percent, to close at 15,518.74. The Nasdaq composite dropped 27.18 points, or 0.7 percent, to 3,665.77.
American Eagle plunged 12 percent after the retailer slashed its earnings forecast in half late Monday, blaming weak sales. The company said cutting prices on clothing to lure in shoppers was hitting its profit margins. American Eagle dropped $2.40 to $17.57.
Two of American Eagle’s rivals also slumped. Abercrombie & Fitch lost $2.09, or 4 percent, to $49.57. Urban Outfitters lost $1.20, or 3 percent, to $42.47.
Most companies have reported better results during the second-quarter earnings season, but sales have slowed. A growing number of companies, including eBay and Marriott, have told analysts to lower their expectations for the coming quarters. The overall picture has left investors with little reason to cheer.
“Earnings have been moving up, just not spectacularly,” said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors. “We’d be much happier to see better revenue growth than what we’ve seen.”
Analysts expect companies in the Standard & Poor’s 500 index to post earnings growth of 4.4 percent in the second quarter. But revenue is on track to shrink 0.6 percent.
Major indexes headed lower from the opening bell Tuesday, bottomed out around 11 a.m. then slowly recovered some of their losses. The Dow was down as much as 138 points.
IBM fell the most in the Dow following reports that the company would require some workers to take time off this month as hardware sales slow. Credit Suisse also cut its rating on the company. IBM dropped $4.51, or 2 percent, to $190.99.