The start of a disappointing earnings season in the United States led to a fourth straight decline in U.S. stocks on Wednesday.
Alcoa and Chevron were among the first to announce quarterly results. The oil company said that its third quarter profits would be "substantially lower" than the previous quarter, leading to a 4.2 percent decline in its shares to 4112.45.
Results of aluminium maker Alcoa were better than what the Street had estimated but it also posted a quarterly loss. Its shares fell 4.6 percent to $8.71 a share.
The company forecast a dip in global aluminium demand in the near term due to a slowdown in China.
The Street is expecting earnings to be soft for the September quarter with constituents of the S&P 500 forecast to report a 2.9 percent decline in earnings.
The Dow Jones Industrial Average(INDEXDJX:.DJI) fell 128.56 points, or 0.95 percent, to end at 13,344.97. The S&P 500(INDEXSP:.INX) dropped 8.92 points, or 0.62 percent, to 1,432.56. The NASDAQ Composite (INDEXNASDAQ:.IXIC) lost 13.24 points, or 0.43 percent, to end at 3,051.78.
Stocks trimmed losses after a report from the Federal Reserve showed that the U.S. economy had expanded a bit, with an uptick in home sales coming from most districts.
The only bright spots in an otherwise weak day of trading was Wal-Mart Stores, which hit an all-time high on the back of strong demand in the upcoming holiday season, while FedEx also showed a healthy advance.
Alcoa Inc.(NYSE:AA) slumped 4.60% after The company reported a net loss of $143 million, or 13 cents per share, compared with a profit of $172 million, or 15 cents per share, in the same quarter last year. Excluding cost related to charges for the settlement of a civil lawsuit and environmental remediation of a New York state river, earnings were 3 cents per share, down from 15 cents a share in the year-ago period. Revenue fell 9 percent to $5.83 billion from $6.42 billion a year ago.
Zynga Inc(NASDAQ:ZNGA) was down 3.50% after Piper Jaffray estimated a decline in revenue for social gaming firms would take up pace next year, with lesser teens showing interest. Piper Jaffray has also noted some doubts on the potential success of City Ville 2, a sequel to its huge hit City Ville that had attracted more than 10 million users daily. City Ville 2 is essentially an updated 3D version of City Ville, however, it experiences headwinds as Zynga’s Web-based games business is facing challenges. Zynga’s strategy looks as if it still needs to be decided.
Accuride Corporation(NYSE:ACW) was down 30.40% or $1.39 to $3.17 after the company was expecting a full-year loss of 5 cents to 12 cents per share before, including a 6 cents per share loss, due to the shutting down of its Elkhart, Ind. Plant. Revenue range is predicted to be between $1 billion and $1.03 billion.
Stocks To Watch Thursday:
Nokia Corporation (ADR)(NYSE:NOK) extended its losses and fell 3% to $2.60. The stock is down another 4% to $2.50 in the pre-market session. The company is all set to report its third quarter earnings on October 18th, 2012. Analysts are estimating the company to report more losses with €0.13 per share, from a loss of €0.08 last quarter and a loss of €0.02 last year. Revenue is projected at t €9.03 billion, from €8.98 billion last year and €9.275 billion the prior quarter.
Wal-Mart Stores, Inc.(NYSE:WMT) shares climbed 1.7 percent to $75.42 after hitting an all-time high of $76.81. Wal-Mart Stores' U.S. unit has said that it is confident of maintaining its growth momentum going into the holiday season, which usually sees a spike in sales.
The company said that it had a sound strategy for the holiday season and it would hasten the opening of small stores.
It said that the company as targeting online sales at $9 billion by 2014.
FedEx Corporation(NYSE:FDX) rose 5.2 percent to $89.99, its largest daily percentage jump this year, as the package delivery company laid out plans to sharply cut costs at two divisions, seeking to improve profits there by $1.7 billion over the next four years.