U.S. stocks on Tuesday fell the most in seven days after Alcoa Inc.'s earnings fell short of forecasts and Washington Mutual Inc. was forced to slash its dividend in a $7 billion bailout.
Washington Mutual led financial shares lower after the largest savings and loan cut its payout by 93 percent and projected a first-quarter loss of $1.1 billion. Alcoa, the aluminum manufacturer among the reported a first-quarter profit drop of more than 50 after Monday's close. Advanced Micro Devices Inc., the second-biggest maker of personal-computer chips, dropped after reporting a 22 percent drop in sales.
U.S. equities were tarnished by the first round of first-quarter earnings results, wrote analysts at Action Economics.
The Standard & Poor's 500 Index lost 5.23 points, or 0.4 percent, to 1,367.31 at 11:42 a.m. in New York. The Dow Jones Industrial Average slid 29.72, or 0.2 percent, to 112,582.71. The Nasdaq Composite Index declined 10.77, or 0.5 percent, to 2,354.06. Almost two stocks dropped for every one that rose on the New York Stock Exchange.
AMD dropped 25 cents, or 3.9 percent, to $6.09 after the computer chip firm said first-quarter revenue fell to about $1.5 billion and announced plans to cut 10 percent of its staff.
Speculation that Washington Mutual would draw an investment of $5 billion helped U.S. stocks make modest gains on Monday. However, shares of struggling lender WaMu were down 8.1 percent.
The Federal Reserve will release minutes from the last rate-setting meeting on March 18, when the benchmark federal funds rate were cut by three quarters of a percentage point. The minutes are due out at 2 p.m in New York.