NEW YORK — A parade of grim news Tuesday, from weak corporate earnings to a pullback at U.S. factories to Europe’s debt crisis, sent investors fleeing stocks for a thirdstraight day.
The Dow Jones industrial average fell 104.14 points, or 0.8 percent, to 12,617.32. It was the third triple-digit point loss in a row for the blue chip index. The last time that happened was September, when fears were rife that the U.S. was on the brink of another recession.
A lower earnings forecast from corporate bellwether United Parcel Service combined with the weak report on manufacturing fed fears of more disappointing results in the coming days.
“Our guess is we haven’t seen the worst,” said Carl Yingst, chief market analyst at Joseph Gunner, an investment bank.
Investors around the world dumped stocks and fled to the relative safety of U.S. government debt. The yield on the benchmark 10-year Treasury note fell to another record low and the dollar hit a two-year high against the euro.
Stocks fell from the start of trading after news that UPS had cut its earnings forecast 4 percent for all of 2012. The package-delivery company said it expects global trade to slow even more than the global economy this year, a first since the financial crisis. Shares of UPS fell $3.61, or 5 percent, to $74.34.
Also weighing on stocks, Spain’s borrowing costs spiked as investors worried that country could become the latest in Europe to ask for a financial lifeline. Spain’s banks have already received help from international lenders.
The broader Standard & Poor’s 500 fell 12.21 points to 1,338.31. The Nasdaq composite was off 27.16 points to 2,862.99.
Three stocks fell for every one that rose on the New York Stock Exchange. Consolidated volume was an average 3.8 billion shares.
Adding to the jitters was a report from Federal Reserve Bank of Richmond indicated that manufacturing in the central-Atlantic region is contracting. That followed reports of pullbacks in New York and Philadelphia.
After the market closed, investors got a rare dose of disappointing news from Apple. The consumer electronics giant reported earnings that missed analysts’ expectations, sending the stock 5 percent lower in after-hours trading.
Late Monday, Moody’s Investors Service issued a warning about the credit rating for Germany. Moody’s anticipates that strong countries like Germany will have to shoulder a heavy financial burden as they support weaker countries like Spain and Italy. The debts of those countries are considered far too big for current bailout funds to handle.
In cutting its outlook on Germany, Moody’s also said there was an “increased likelihood” that Greece would leave Europe’s monetary union.
“Things are only going to get worse,” said Adrian Day, president of Adrian Day Investment Management. He added that he’s not buying stocks, save for gold-related companies, because he expects them to head lower as the European crisis deepens.
The euro fell to $1.20 on Tuesday, a two-year low against the dollar.
Business, Pages 26 on 07/25/2012