Wall Street falls broadly ahead of earnings
By Ryan Vlastelica NEW YORK (Reuters) - U.S. stocks fell for a second day in a broad decline on Tuesday as investors held off from making big bets going into the start of corporate earnings season. The day's losses were broad, with eight of the ten primary S&P 500 sectors down on the day. The only one to rise solidly was utilities, a defensive group, which added 0.4 percent. About 60 percent of stocks traded on the New York Stock Exchange fell while almost three-fourths of Nasdaq-listed names fell. In a cautious sign about consumers, Bill Simon, the chief executive officer of Wal-Mart's U.S. division, told Reuters that while the domestic job market was improving, that wasn't giving consumers enough confidence to boost spending. Recent U.S. economic data has been strong, following a dismal start to the year, and market participants are looking to corporate earnings for confirmation that the economy snapped back in the second quarter. Many analysts are especially looking for an acceleration in revenue growth. "The bar has been raised and expectations for earnings are higher than they were last quarter," said Randy Frederick, managing director of active trading at Charles Schwab in Austin. "If they don't come in as expected, stocks could pull back," Profits for S&P 500 companies are seen growing 6.2 percent in the second quarter, according to Thomson Reuters data, down from the 8.4 percent growth forecast at the start of April. Revenue is seen up 3 percent. Alcoa Inc, among the first high-profile names to report, will release results after the market closes on Tuesday. The aluminum maker is seen posting profit growth of more than 50 percent, according to Thomson Reuters data, along with a 3.6 percent decline in revenue. Shares rose 0.6 percent to $14.83. Wells Fargo & Co is among the few S&P 500 companies slated to report this week, but next week will see dozens of bellwether names report, including numerous Dow components. The Dow Jones industrial average fell 84.46 points or 0.5 percent, to 16,939.75, the S&P 500 lost 9.43 points or 0.48 percent, to 1,968.22 and the Nasdaq Composite dropped 39.18 points or 0.88 percent, to 4,412.35. With the day's decline, the Dow fell back under the psychologically important 17,000 level, though both it and the S&P 500 found support at their 14-day moving averages. Small-cap stocks underperformed, dropping for a second straight day. The Russell 2000 fell 1 percent for its biggest two-day drop since April. Airline stocks were among the weakest of the day. Delta Air Lines fell 4.7 percent to $35.18 as the S&P 500's biggest decliner, followed by Southwest Airlines Co, down 4.3 percent to $26. Overseas, Air France-KLM gave a full-year profit warning, citing weak prices and overcapacity. NeuroMetrix Inc shares jumped 39 percent to $2.64 after the U.S. Food and Drug Administration cleared the company's wearable technology for over-the-counter use in the treatment of chronic pain. Groupon Inc rose 2.2 percent to $6.60 after B. Riley upgraded the stock to "buy" from "neutral." (Editing by Nick Zieminski)
