US stocks fell yesterday, a day after the earnings season opened with Alcoa posting a quarterly net loss and Chevron saying profits would fall sharply in its most recent period.
After hitting lows in the early afternoon, stocks briefly trimmed losses after the Federal Reserve said in its Beige Book report that the economy was expanding modestly.
Shares of Alcoa slid 4.2 per cent to $8.74 and weighed on the Dow industrials following the US aluminum producer’s report late Tuesday of a quarterly net loss, which it linked to a slump in the price of aluminum and weak demand.
Chevron shares fell 4.4 per cent to $112.19 and were the biggest drag on the S&P 500 after the second-largest US oil company said third-quarter profits would be “substantially lower” than in the previous quarter.
“I think the poor earnings for the third quarter are baked into the market. If that were the only issue I think there would be limited downside,” said William Delwiche, investment strategist at US wealth management firm Robert W Baird.
“But what matters now is the outlook for the fourth quarter and 2013. So far it seems to be one of more caution, and if that trend continues that could be a headwind for stocks,” he added.
The Dow Jones industrial average fell 113.56 points to 13,359.97 while Standard & Poor’s 500 Index was down 7.52 points at 1,433.96. The Nasdaq Composite Index fell 10.24 points to 3,054.78.
The S&P energy sector index fell 1.9 per cent.