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A steep slide in health care companies led U.S. stocks broadly lower in afternoon trading Tuesday. Energy stocks tumbled as the price of crude oil headed lower. Investors now have their eye on Corporate America as companies begin to report earnings over the next few weeks. Alcoa slumped after its earnings fell short of Wall Street’s expectations.
KEEPING SCORE: The Dow Jones industrial average fell 196 points, or 1.1 percent, to 18,132 as of 1:15 p.m. Eastern time. The Standard & Poor’s 500 index 26 points, or 1.2 percent, to 2,137. The Nasdaq composite index lost 77 points, or 1.5 percent, to 5,251.
THE QUOTE: Most of the market’s attention was on bond markets, with yields now back at levels not seen in about six months, noted Erik Davidson, chief investment officer for Wells Fargo Private Bank. Bond yields are being driven up amid growing anticipation among investors that the Federal Reserve will raise its key interest rate later this year, as well as uneasiness over the impact of rising oil prices.
“Oil having done well, historically, that’s been bad for the market,” Davidson said. “With oil back above $50 (a barrel), the market is starting to have some concern about that.”
BIG SLUMP: Illumina sank 24.9 percent after the genetics research company announced late Monday that its third-quarter revenue fell short of Wall Street’s expectations. The stock shed $45.97 to $138.88.
ROUGH QUARTER: Alcoa slid 10.3 percent after it reported softer-than-expected results for the third quarter, its last one before Alcoa splits into two companies on Nov. 1. The stock lost $3.23 to $28.28.
HEART STOPPER: St. Jude Medical dropped 3.1 percent after the medical device maker warned that the lithium battery in some of its implanted heart devices may run out of energy prematurely. The stock lost $2.52 to $78.76. Shares in Abbott Laboratories, which in April agreed to buy St. Jude for $25 billion, also fell. Abbott slid $1.93, or 4.4 percent, to $41.57.
FASTENAL: Fastenal slid 4.5 percent after the maker of industrial and construction fasteners reported third-quarter earnings that fell short of financial analysts’ forecasts. The stock lost $1.91 to $40.21.
FORGET THIS: Digital storage companies Seagate Technology and Western Digital were both down in morning trading Tuesday. Seagate fell $2.52, or 6.6 percent, to $35.45, while Western Digital slid $2.25, or 3.8 percent, to $57.01.
SMARTPHONE WIN: Apple was up 0.8 percent after rival Samsung announced it was discontinuing its Galaxy Note 7 phone permanently because of overheating handsets. The Galaxy Note 7 competed with Apple’s iPhone. Apple gained 94 cents to $116.94.
OVERSEAS MARKETS: In Europe, Germany’s DAX fell 0.4 percent, while France’s CAC 40 slid 0.6 percent. Britain’s FTSE 100 slipped 0.4 percent. Earlier in Asia, Samsung’s problems weighed on South Korea’s Kospi, which ended the session down 1.2 percent. Elsewhere in the region, Japan’s benchmark Nikkei 225 rose 1.0 percent, while Australia’s S&P/ASX 200 added 0.1 percent. Hong Kong’s Hang Seng dropped 1.4 percent.
OIL: Crude oil prices were down a day after spiking to their highest level in a year. Benchmark U.S. crude oil was down 63 cents, or 1.2 percent, to $50.72 a barrel in New York. Brent, the international standard, was down 76 cents, or 1.4 percent, to $52.38 a barrel in London.
BONDS AND CURRENCIES: Bond prices fell. The yield on the 10-year Treasury rose to 1.76 percent from 1.72 on Friday. Bond markets were closed Monday. In currency markets, the dollar strengthened to 103.46 yen from 103.68 on Monday. The euro fell to $1.1068 from $1.1139.