U.S. stocks veered lower in afternoon trading Tuesday, weighed down by weak results from International Business Machines Corp. (NYSE: IBM, Stock Forum) and United Technologies Corp. (NYSE: UTX, Stock Forum) and other companies. Telecommunications stocks were among the biggest decliners. Apple and Microsoft were among the other big-name companies reporting earnings later in the day.
KEEPING SCORE: The Dow Jones industrial average fell 208 points, or 1.2 per cent, to 17,892 as of 1:20 p.m. Eastern Time. The Standard & Poor's 500 index shed 10 points, or 0.5 per cent, to 2,117. The Nasdaq composite slid 14 points, or 0.3 per cent, to 5,204. Tuesday's declines follow three straight gains for the S&P and Nasdaq.
THE QUOTE: ``Today's weakness is somewhat expected,'' said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. ``Investors appear to be in a listen-only mode as we await greater clarity on second-quarter results.''
ALL ABOUT EARNINGS: About 60 per cent of the companies in the S&P 500 report over the next two weeks. Investors are combing the results to get a read on how the economy is doing. But it's still early days. Roughly 12 per cent of the S&P 500 companies have reported so far. Some 70 per cent of them have beaten Wall Street's already low expectations.
REVENUE MISS: IBM slumped 6.1 per cent following a mixed earnings report late Tuesday. The business software company delivered better-than-expected earnings, but its revenue fell short of financial analysts' forecasts. The stock slumped $10.53 to $162.69.
SECTOR WATCH: Nine of the 10 sectors in the S&P 500 index declined, with telecommunications stocks falling the most. The sector was down 2.8 per cent. Energy stocks rose slightly.
ROUGH QUARTER: United Technologies slid 7.6 per cent after the aerospace giant's latest earnings didn't meet forecasts. The company also cut its outlook for 2015, citing weaker sales of Otis elevators in Europe and China's slowing economy. The stock lost $8.43 to $102.05.
DIVIDEND GONE: Chesapeake Energy slid 7.1 per cent on news that the energy company has axed its annual dividend and will redirect the money into its 2016 capital spending program. The move comes as natural gas and crude are in an extended decline with few signs of a rebound. The stock lost 72 cents to $9.55.
HIGH ON THE HOG: Harley-Davidson surged after the motorcycle maker's second-quarter earnings beat Wall Street expectations. The stock added $2.22, or 4 per cent, to $57.16.
MARKETS OVERSEAS: In Europe, Germany's DAX was down 1.1 per cent, while the CAC-40 in France fell 0.7 per cent. The FTSE 100 index of leading British shares slipped 0.3 per cent. In Asia, Japan's Nikkei 225 added 0.9 per cent and South Korea's Kospi gained 0.5 per cent. Hong Kong's Hang Seng rose 0.6 per cent. The Shanghai Composite Index in mainland China rose 0.6 per cent.
ENERGY: Benchmark U.S. crude rose 27 cents to $50.71 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, climbed 12 cents to $56.77 a barrel in London.
BONDS: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.34 per cent from 2.38 per cent late Monday.
Meanwhile, the S&P/TSX composite index was down 76.72 points to 14,348.83 in afternoon trading.
The move came as the August contract for gold was down US$3.10 at US$1,103.70 per ounce.
The September contract for crude oil gained 48 cents at US$50.92, while the August contract for natural gas climbed 5.7 cents at US$2.88.
The Canadian dollar was up 0.16 of a cent at 77.10 cents US.