US stocks fell on Tuesday, weighed by losses in the industrials and technology sectors, as fears of slowing global economic growth resurfaced after the International Monetary Fund trimmed its outlook in a week of heavy corporate earnings.
The gloomy IMF forecasts, released on Monday, predicted the global economy will grow at 3.5 percent in 2019 and 3.6 percent in 2020, down 0.2 and 0.1 percentage point, respectively, from last October's forecasts.
The downgrades reflected weakness in Europe and came on the same day China released data that confirmed its slowest growth rate in 28 years due to faltering domestic demand and bruising US tariffs.
Ten of the 11 major S&P 500 sectors were lower with industrials and technology down over 1 percent. Both sectors house companies with big exposure to overseas business, including in China.
Pressuring industrials the most were the 14 percent slide in shares of Stanley Black & Decker Inc after the hand tools and hardware maker forecast 2019 profit below analysts' estimates.
The S&P healthcare sector also fell 0.84 percent after Johnson & Johnson forecast 2019 sales below analysts' expectations. Shares of the healthcare giant dropped 1.9 percent.
Chip stocks, which get a large portion of their revenue from China, also fell. The Philadelphia semiconductor index tumbled 2.32 percent.
"The larger concern is slowing global economic growth," said Art Hogan, chief market strategist at National Securities in New York.
"The S&P 500 has more than half of its companies with businesses overseas, so an outlook like this is also going to impact the earnings of 2019 as well."
At 10:02 a.m. ET the Dow Jones Industrial Average was down 166.65 points, or 0.67 percent, at 24,539.70, the S&P 500 was down 23.09 points, or 0.86 percent, at 2,647.62 and the Nasdaq Composite was down 72.29 points, or 1.01 percent, at 7,084.94.
At least 12 percent of S&P 500 companies have reported earnings so far and analysts have lowered their fourth-quarter earnings forecast for S&P 500 companies to 14.1 percent year-over-year growth from 20.1 percent estimated on Oct. 1, according to IBES data from Refinitiv.
The energy sector slipped 1.47 percent, as oil prices fell on worries of lower fuel demand from China, the world's second largest consumer. [O/R]
Halliburton Co's shares fell 4.0 percent after the oilfield services company saw a slowdown in well completions in North America.
Despite the day's drop, all the three major indexes were still holding gains above their 50-day moving average prices, a closely watched level of near-term momentum.
A strong rally in January fueled by hopes of a breakthrough in the U.S.-China trade talks and dovish comments from the Federal Reserve has set the benchmark S&P 500 index about 9.5 percent away from its record closing high it hit on September 20.
Arconic Inc shares slumped 16.9 percent after the aluminum products maker said it was no longer pursuing a sale.
EBay Inc jumped 8.9 percent after shareholder Elliott Management Corp urged the ecommerce platform to restructure and sell some businesses to double its market value in the next two years.
Shares of Travelers Cos Inc rose 0.4 percent after the insurer reported a better-than-expected fourth-quarter profit, as growth in premiums and investment income offset catastrophe losses related to the California wildfires.
Declining issues outnumbered advancers for a 3.40-to-1 ratio on the NYSE and for a 2.62-to-1 ratio on the Nasdaq.The S&P index recorded two new 52-week highs and one new low, while the Nasdaq recorded 12 new highs and 13 new lows.