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Stocks hammered by weak earnings reports

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Stocks sank sharply Tuesday morning, driving major indexes to their lowest point since early September, after big-name companies reported weak quarterly earnings and lowered their expectations for the rest of the year.

The Dow Jones industrial average sank 245 points, or 1.8 percent, to 13,100. The Standard & Poor's 500 index fell 24 points, to 1,409. The NASDAQ composite index was off 39 points, at 2,977.

The day was shaping up to be among the worst of the year on Wall Street. The Dow's biggest decline was 274 points, on June 1.

3M, which makes everything from Scotch tape to coatings for LCD screens and is an economic bellwether, reduced its profit expectations for this year because of "current economic realities."

Chemical maker DuPont said it will cut 1,500 jobs and take other steps to increase competitiveness after earnings fell sharply last quarter. UPS reported lower earnings and said it was uncertain about the holiday shopping season.

Xerox shares plunged 8 percent, or 56 cents each, to $6.47. Xerox's income dropped 12 percent in the third quarter following steep declines in sales for equipment, supplies and related products. The stock is off 19 percent so far this year.

Some of the disappointing revenue is because of weakness in foreign markets. Multinational companies are having a hard time selling to Europe, which is struggling under a debt crisis and a spreading recession.

The red-hot growth enjoyed by emerging markets like China and India is also slowing, and many businesses that had relied on growth there to offset weak U.S. consumer demand are being forced to come up with new strategies.

"The recession in Europe is very real," said Bernard Schoenfeld, senior investment strategist for Bank of New York Mellon Wealth Management in New York. "It's not going to disappear very quickly, and it will certainly negatively affect earnings of exporters in the United States."

Financial analysts have predicted that earnings for S&P 500 companies for July through September would be lower than the year before, breaking a three-year winning streak.

There was more bad news on manufacturing Tuesday from one of the regional branches of the Federal Reserve.

The Federal Reserve Bank of Richmond, Va., reported that manufacturing in the central Atlantic region "pulled back" in October following a slight improvement the month before. Manufacturers were also less optimistic about the next six months.

The price of crude oil fell $2.41 per barrel, to $86.24. And as investors sold stocks, they bought bonds, driving yields lower. The yield on the benchmark 10-year U.S. Treasury note sank to 1.76 percent from 1.82 percent Monday.

Among individual stocks, 3M and DuPont were among the worst performers. DuPont plunged $4.15, or 8.3 percent, to $45.61. 3M was down $2.37, or 2.6 percent, at $90.16.

Apple fell $6, to $628, ahead of the expected release of a smaller version of its iPad. Apple has the most sway among stocks in the S&P 500 and the NASDAQ composite and helped drive those indexes lower.

Materials stocks and energy companies fell the most in the broader market, each losing more than 2 percent.

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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