U.S. stocks traded firmly lower on Tuesday as disappointing results from aluminum giantAlcoa Inc. set the tone for the broader market as the third-quarter earnings season gets under way this week.
Shares of Alcoa dropped more than 9% in early trade, and were on track for their worst daily drop in about five years, according to FactSet data.
A retreat in oil prices also weighed on energy and materials stocks.
The S&P 500 index fell 16 points, or 0.8%, to 2,147, with all of its main sectors trading lower. Health-care and materials sector were leading decliners, down nearly 1.5%.
The Dow Jones Industrial Average dropped 120 points, or 0.7%, to 18,208, with Visa Inc. and Intel Corp leading losses.
Meanwhile, the Nasdaq Composite Index fell 40 points, or 0.8%, to 5,288, dragged down by heavy losses in biotech stocks. The iShares Nasdaq Biotechnology ETF was down 2.5%.
“Today’s slump in stocks is mostly due to a retreat in oil and commodities in general, as well as disappointing earnings from Alcoa,” said Ryan Larson, head of equity trading at RBC Global Asset Management.
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