Dow falls 128; Alcoa, Chevron lead the way
NEW YORK -- Downbeat reports from Alcoa and Chevron at the start of corporate earnings season pulled stock indexes lower for a third straight day Wednesday. The Dow Jones industrial average slumped 128 points, its steepest loss since late June.
Alcoa, the aluminum producer, beat Wall Street's earnings estimates on Tuesday night but said it expects a slowdown in China to weaken demand for aluminum. Its stock fell 42 cents Wednesday to $8.71.
The company is often used as a weather vane for the global economy. "And judging by Alcoa's massive inventory of aluminum, it seems pretty anemic," said Jack Ablin, chief investment officer at Harris Private Bank.
Chevron, the country's second-largest oil company, warned late Tuesday that slumping oil prices and production would cause earnings to be "substantially lower." It blamed Hurricane Isaac for disrupting production at a Mississippi refinery.
On Tuesday, the Supreme Court also refused to block a $19 billion judgment levied against Chevron by an Ecuadorian court for polluting the Amazon. Chevron's stock sank $4.91 to $112.45.
The Dow fell 128.56 points to close at 13,344.97, just shy of 1 percent, its fourth straight drop and the largest point decline since June 25. Chevron alone pulled the Dow down 38 points.
The Standard & Poor's 500 index fell 8.92 points to 1,432.56.
Alcoa and Chevron's results were an unpromising start to the third-quarter earnings parade, said JJ Kinahan, chief derivatives strategist at Ameritrade. "It's beginning to look like we might have a lot of gloom-and-doom earnings calls this quarter," he said.
In other trading, the Nasdaq lost 13.24 points to 3,051.78. The yield on the benchmark 10-year Treasury slipped to 1.68 percent, down from 1.71 percent late Tuesday.