Stocks slump on earnings worries
Wall Street retreats for a second session as investors gear up for the start of earnings. Alcoa due after the close.
NEW YORK (CNNMoney.com) -- Stocks tumbled Tuesday morning, extending the previous day's selloff, as investors geared up for what is expected to be a wretched period of corporate results.
The Dow Jones industrial average (INDU) lost 145 points, or 1.9% in the early going. The S&P 500 (SPX) index dipped 18 points, or 2.2%. The Nasdaq composite (COMP) fell 30 points, or 1.9%.
Asian stocks finished lower, and European markets were down in afternoon trading.
Anthony Conroy, head trader at BNY ConvergEx Group, said the markets were being influenced, in part, by comments from investor George Soros, who questioned the staying power and validity of the recent four-week rally after stocks slipped on Monday.
"We must maintain some semblance of confidence in the economy," said Conroy. "There's this tremendous amount of nervousness, and this nervousness breeds volatility."
Art Hogan, chief market strategist at Jefferies & Co., said stocks are vulnerable to a downturn, following their recent rally.
"We enter the earnings season at a more elevated level in stock prices, which is more dangerous [for a potential downturn,]" said Hogan.
But he added that traders won't be shocked to see weak earnings and losses from the first quarter, and these low expectations could soften the stock reaction.
"I think that anticipation of how bad it's going to be are priced into the market," said Hogan. "I think that the expectations for first-quarter earnings are very attainable."
Earnings: Aluminum giant Alcoa (AA, Fortune 500), a Dow component, is the first major company to report results, following the market close. Alcoa is expected to have lost 57 cents per share, according to analysts surveyed by Thomson Reuters. Alcoa earned 44 cents per share a year earlier. Shares fell 4% in the early going.
Economy: The consumer credit report from the Federal Reserve is due out at 2 p.m. ET. Borrowing costs are expected to have fallen by 1.5% in February, according to a Briefing.com survey. Costs showed a surprise jump of 1.8% in January
GM: The automaker is teaming up with Segway to make an electrically powered vehicle with only two wheels. The two-seated vehicle would change urban mobility, the company said.
The announcement of the new vehicle comes ahead of the New York Auto Show and as the company struggles to come up with a more aggressive plan to cut costs and debt.
Up to seven investors have expressed an interest in buying a stake in GM's (GM, Fortune 500) European operation, according to a report in the Financial Times.
GM chief Fritz Henderson has said that while the automaker is working to avoid collapse, bankruptcy remains a possibility. Shares fell 2%.
Techs: Stocks to watch include Sun Microsystems (JAVA, Fortune 500), which may have to sell off pieces of itself to attract a suitor after rejecting IBM's (IBM, Fortune 500) $7 billion takeover offer over the weekend. (Full story)
Oil and money: Oil fell $1.45 to $49.60 a barrel. The dollar slipped versus the yen, but rose against the euro and the British pound. 
-
Steve Jobs revived Apple, defying the worst economic conditions since the Great Depression. More -
Consumers looking to buy electronics for holiday gifts won't have to break the bank this season. More -
Search firm says it will pay the bill for wireless Internet during the holidays. More -
Twitter and LinkedIn hook up, signing agreement to let users share information across both platforms. More -
The search firm is investing heavily in Google Earth, but will its gamble be profitable? Play -
Anne Giapapas has a job in one of the 15 most overworked and underpaid professions. More -
These 5 businesses are offering their services -- from shoes to hair cuts -- to the unemployed. More
