U.S. stocks plunged Tuesday, with the Dow Jones Industrial Average tumbling more than 300 points, after a mix of weaker-than-expected economic data and disappointing corporate earnings weighed on investor sentiment. Although consumer confidence rose to a seven-year high this month, the data did little to boost stocks early in the trading session. 


The Dow Jones Industrial Average, which measures the share prices of 30 large industrial companies, dropped 291.49 points, or 1.65 percent, to close at 17,387.21; the S&P 500 stock index lost 27.54 points, or 1.34 percent, to end at 2,029.55. The Nasdaq Composite dropped 90.27 points, or 1.89 percent, to finish at 4,681.50.

Durable goods orders, a key indicator for growth of the U.S. economy, revealed orders for business equipment dropped 3.4 percent last month, signaling weak demand from U.S. multinationals as the global economy continues to slow. 

However, separate data showed U.S. consumer confidence rose sharply in January and is now at its highest level since August 2007, as a more positive assessment of current business and labor market conditions contributed to the improvement in consumers’ view of the present situation.

The Conference Board’s Consumer Confidence Index rose to 102.9 in January, up from 93.1 in December. 

“Consumers also expressed a considerably higher degree of optimism regarding the short-term outlook for the economy and labor market, as well as their earnings,” Lynn Franco, director of Economic Indicators at the Conference Board, said in a statement.

Separate data showed new home sales jumped to 481,000 in December, versus expectations of 450,000, according to analysts polled by Reuters. Meanwhile, separate data showed home prices in 20 cities rose 4.3 percent in November, according to the S&P/Case-Shiller Index.

Weaker-than-expected corporate earnings also weighed on investor enthusiasm, causing additional concern about how a slowdown in global oil prices since June is impacting U.S. multinational corporations. Caterpillar Inc., the world’s largest manufacturer of construction and mining equipment, dropped more than 7 percent Tuesday after the equipment maker’s earnings plunged 25 percent last quarter, driven by the drop in oil prices. Caterpillar reduced its sales outlook in 2015 as current oil prices are a “significant headwind” for the company and warned that world economic growth will only "improve modestly" in 2015.

After the closing bell Tuesday, investors will turn their attention to more corporate earnings as tech giant Apple Inc. is scheduled to issue quarterly results after the company smashed expectations for sales and profits during the previous quarter following the release of the company’s iPhone 6 and 6 Plus.

Apple Inc. is expected to report fiscal first-quarter net income of $15.32 billion, or earnings per share of $2.57, on revenue of $67.5 billion, according to Reuters data. That compares with a profit of $13.07 billion, or earnings per share of $2.07, on revenue of $57.59 billion a year ago.

Ahead on the economic calendar, economists will get a glimpse into the overall health of the U.S. economy as the Federal Reserve kicks off its first two-day policy meeting of the year Tuesday. Most economists expect the central bank to hike interest rates in mid-2015, but if falling oil prices have a negative effect on an improving U.S. economy, weighing on inflation and wage growth, the Fed could pause before raising rates.

The Federal Open Market Committee will release a statement Wednesday at 2 p.m. EST following the Fed's two-day meeting.