NEW YORK – U.S. stocks tumbled Tuesday, with the Nasdaq 100 index falling the most since April, as a drop in durable-goods orders and disappointing results by companies from Caterpillar to Microsoft heightened concern about the economy’s strength.
Technology shares in the Standard & Poor’s 500 index plunged by 3.3 percent for the biggest drop since November 2011. Microsoft lost 9.3 percent, the most in 18 months, as software license sales to businesses were below forecasts. Caterpillar plunged by 7.2 percent after forecasting 2015 results that trailed estimates as plunging oil prices signal lower demand from energy companies.
Procter & Gamble slid by 3.5 percent as a surging U.S. dollar cut into its earnings.
Apple jumped by more than 6 percent in after-market trading as it reported revenue that topped estimates. Yahoo surged by 6 percent in late trading after announcing a tax-free spinoff of its stake in Alibaba.
“Currency head winds, as well as evidence of a continual deceleration of global growth, are having a major impacts on quarterly results,” Chad Morganlander, a money manager at St. Louis-based Stifel, Nicolaus & Co., which oversees about $160 billion, said in a phone interview. “Coupled with that, durable goods orders were somewhat disappointing, which scotches any optimism for today’s trading session.”
The Standard & Poor’s 500 index slipped by 1.3 percent to 2,029.55, below its average for the previous 50 days. The Dow Jones industrial average declined by 291.49 points, or 1.7 percent, to 17,387.21, after losing almost 400 points earlier in the day. The Nasdaq 100’s 2.6 percent drop was its biggest since April.
About 6.5 billion shares changed hands on U.S. exchanges, 3.6 percent below the three-month average.
Of the S&P 500 members that have reported profit so far, 75 percent have exceeded projections that analysts have lowered since late last year. Analysts indicate that profits at S&P 500 companies climbed by 1.1 percent in the final three months of 2014, down from an October estimate of 8.5 percent.
“Everybody is aware of weakness in crude oil, but you’re seeing spillover into large, industrial companies like Caterpillar and that may be giving people pause,” Peter Jankovskis, who helps oversee $1.9 billion as co-chief investment officer of Lisle, Ill.-based OakBrook Investments LLC, said in a phone interview. “And certainly Microsoft is a bellwether of the tech industry, and that’s another cause that’s having people pulling back.”
Orders for business equipment unexpectedly fell in December for a fourth month, signaling a global growth slowdown is weighing on American companies. Bookings for nonmilitary capital goods excluding aircraft dropped by 0.6 percent for a second month, Commerce Department data showed. Demand for all durable goods declined by 3.4 percent, the worst performance since August.
Purchases of new homes in the United States rose by 12 percent in December to a 481,000 annualized pace from a 431,000 rate in the prior month, according to Commerce Department figures. U.S. consumer confidence increased this month as declining unemployment and lower fuel costs lifted Americans’ outlooks.
Microsoft plunged by 9.3 percent, the most since July 2013. Revenue slumped in China and Japan, and a stronger U.S. dollar curbed sales of business software licenses. Unearned revenue, a measure of future sales, missed analysts’ estimates.
Caterpillar lost 7.1 percent for its biggest drop since August 2011. The world’s largest maker of mining and construction equipment forecast lower-than-estimated earnings and revenue for 2015.