Dow sinks on weak IBM, United Technologies earnings

NEW YORK (AFP) - Disappointing earnings from IBM and United Technologies pummeled the Dow on Tuesday and led the broader market lower.

The Dow Jones Industrial Average tumbled 181.12 points (1 per cent) to 17,919.29.

The broad-based S&P 500 dropped 9.07 (0.43 per cent) to 2,119.21, while the tech-rich Nasdaq Composite Index fell 10.74 (0.21 per cent) to 5,208.12, snapping a streak of three straight record highs.

The Dow was in the red all day after IBM reported lower revenues for the 13th consecutive quarter and United Technologies cut its earnings forecasts due to weak growth in China and weak aviation parts sales.

IBM fell 5.9 per cent, while UTC dropped 7 per cent.

Art Hogan, chief market strategist at Wunderlich Securities, said attention has shifted from last week's bailout deal to keep debt-riddled Greece in the euro zone to "micro" issues surrounding earnings.

"And the micro is a mixed bag," he said.

Dow member Verizon Communications fell 2.4 per cent after reporting second-quarter net income of US$4.4 billion (S$6 billion), about 0.7 per cent above that of the year-ago period.

Revenues of US$32.22 billion fell shy of the US$32.45 billion projected by analysts.

Harley-Davidson advanced 5 per cent as second-quarter earnings and revenues both topped analyst expectations.

The company confirmed its 2015 targets, including a 2 to 4 per cent rise in motorcycle deliveries compared with last year.

Tesla Motors fell 5.5 per cent after UBS downgraded the stock, predicting car volume growth would disappoint and warning of higher costs and increased competition from other auto companies.

Qualcomm gained 2.1 percent following a Wall Street Journal report that said the company plans a strategic review that could lead to a breakup of the chipmaker.

Chesapeake Energy tumbled 9.5 per cent after announcing that it will drop its dividend and steer the money into its drilling programme.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.34 per cent from 2.38 per cent Tuesday, while the 30-year dipped to 3.08 per cent from 3.1 per cent Monday. Bond prices and yields move inversely.