Dow, S&P 500 slump on disappointing outlooks for companies, and lower orders for durable goods

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FILE - In this Oct. 2, 2014, file photo, Wall Street is etched in the facade of a building in New York's Financial District. The U.S. stock market is opening sharply lower, Tuesday, Jan. 27, 2015, following disappointing corporate earnings and weak economic news. (AP Photo/Richard Drew, File)


A trader watches his screens at the stock market in Frankfurt, Germany, Monday, Jan. 26, 2015. Global financial markets shrugged off the election victory of an anti-austerity party in Greece, with most investors appearing to conclude on Monday that it is unlikely to lead the country to fall out of the euro. (AP Photo/Michael Probst)


U.S. stocks tumbled in midday trading Tuesday, weighed down by disappointing business forecasts from big-name companies and an unexpected drop in orders of long-lasting goods. The slide sent the Dow Jones industrial average down nearly 400 points at one point.

KEEPING SCORE: The Dow Jones industrial average was down 347 points, or 2 percent, to 17,331 as of 11:42 a.m. Eastern time. The blue-chip average dropped as much as 390 points earlier. The Standard & Poor's 500 shed 28 points, or 1.4 percent, to 2,028. The Nasdaq composite slid 83 points, or 1.7 percent, to 4,688. The indexes are declining after closing higher on Monday.

THE QUOTE: "A lot of today's sell-off is looking forward, saying, once again earnings expectations are being lowered," said JJ Kinahan, TD Ameritrade's chief strategist. "All we've done is lower earnings expectations the last year and a half."

SECTOR VIEW: The 10 sectors in the S&P 500 fell, with technology stocks dropping the most. The sector is down 3.3 percent for the year.

PC PROBLEMS: Microsoft shares tumbled a day after the company's noted in its latest quarterly results that licensing revenue for its Windows operating system fell 13 percent due in part to weak PC sales in China and Japan. Management also warned that a strong dollar will dent revenue by 4 percent in its fiscal third quarter. Microsoft shares slid $4.66, or 9.9 percent, to $42.35.

ROUGH QUARTER: Caterpillar's stock fell 7.3 percent after the heavy equipment maker was hurt in the fourth quarter by restructuring costs and issued a weak outlook. The stock shed $6.32 to $79.75.

ECONOMIC WORRIES: The Commerce Department reported that orders for long-lasting manufactured goods dropped 3.4 percent in December, dragged lower by a big decline in demand for commercial aircraft. There was also weakness in a number of areas, with demand for machinery, computer and primary metals all down. Economists had been forecasting a small increase for December.

HOUSING REPORTS: Separate reports shed light on the housing market Tuesday. The Standard & Poor's/Case-Shiller 20-city home price index showed that U.S. home prices rose at a modest pace in November, held back by weaker sales and a limited number of available houses. Meanwhile, the Commerce Department reported that sales of new U.S. homes accelerated 11.6 percent last month, a sign that home sales may improve after a lackluster 2014.

CURRENCY PAIN: Procter & Gamble fell 3.8 percent as the strong U.S. dollar cut into the consumer products maker's second-quarter earnings. The company said that exchange rates will remain a challenge well into fiscal 2015, especially in the second half of its year. The stock slid $3.38 to $86.20.

DASHED EXPECTATIONS: Shares in 3M fell 1.7 percent after the maker of Post-it notes, industrial coatings and ceramics reported fourth-quarter revenue that fell short of Wall Street's forecasts. The stock lost $2.78 to $161.46.

ABOVE THE REST: Lower fuel prices and steady demand for travel pushed American Airlines Group's earnings to a record high in the fourth quarter. CEO Doug Parker said Tuesday that 2015 is shaping up as another strong year. Even so, the company said that a key revenue figure would decline in the first quarter. That sent shares down $1.75, or 3.3 percent, to $53.70.

EUROPEAN MARKETS: France's CAC 40 fell 1.3 percent, while Germany's DAX was off 1.7 percent. Investors were still weighing the implications of Sunday's election victory by Greece's Syriza party, which has vowed to end painful austerity policies that are a condition of the country's international bailout program.

ASIA'S DAY: Japan's Nikkei 225 stock average jumped 1.7 percent, while South Korea's Kospi added 0.9 percent. Hong Kong's Hang Seng lost 0.4 percent.

ENERGY: Benchmark U.S. crude rose 74 cents to $45.89 a barrel. Oil has plunged since June, when it traded above $100, on high supplies and weak growth in demand.

BONDS: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 1.77 percent.

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