U.S. stocks slumped Tuesday after some of the market’s largest companies reported disappointing earnings, taking investors on a turbulent ride that deepened the losses for the year.
The companies that rattled the market included Microsoft, Caterpillar and Procter & Gamble. Some also forecast weaker results in months ahead.
An unexpected drop in U.S. orders of long-lasting goods also weighed on the market, briefly dragging the Dow Jones industrial average down 390 points early in the day before it pared back some of the losses. It was the biggest one-day decline for the blue-chip index since Jan. 5.
The downbeat company report cards raise concerns about Corporate America’s ability to grow profits at a time when many investors are expecting the resurgent U.S. economy to drive earnings should economic growth weaken overseas.
“That theme, ‘Boy, this is the year earnings are going to come back,’ suffered a little bit of a setback,” said Sean Lynch, co-head of global equity strategy at Wells Fargo Investment Institute. “Investors are starting to worry that the stronger dollar and some the impacts of energy aren’t always positive.”