Lackluster earnings and guidance from blue-chip stocks and a drop in durable-goods orders sent stocks skidding.
The Dow Jones Industrial average, down nearly 400 points at its low point, ended the session off 291.49 points, or 1.7 percent, and the S&P 500 lost 27.54 points, or 1.3 percent while its retail subset, the S&P 500 Retailing Industry Group, was off 7.61 points, or 0.7 percent to end the session at 1,022.70.
The WWD Global Stock Tracker pulled back from a record high Monday to close off 0.8 percent at 110.72.
Stocks reacted to a string of disappointing fourth-quarter earnings and 2015 guidance from blue-chip firms including The Procter & Gamble Co. and Caterpillar. Those reporting results or offering guidance below expectations cited the strength of the dollar and its negative impact on currency translation of overseas sales for their shortfalls or modest expectations.
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While stocks came back from morning lows, several climbed higher after the close of the markets as strong reports arrived from Apple, Yahoo and others. Apple far exceeded estimates for iPhone sales and Yahoo said it would spin off its stake in Alibaba Group, sending both sharply higher in after-hours trading and prompting expectations of a better day in the markets Wednesday.
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Earlier in the day, investors were disturbed by the Commerce Department’s report of a 3.4 percent decline in December orders of durable goods.
The Conference Board’s Consumer Confidence Index climbed to 102.9 this month, up from 93.1 in December for its highest reading since August 2007. Crude oil prices firmed while the euro gained against the dollar.
Elizabeth Arden Inc. shares suffered the largest decline among the WWD tracker’s global group of 100 fashion, retail and beauty stocks, dropping 3.7 percent to $16.74. P&G shed 3.5 percent to $86.49 on its earnings report while Avon Products slid 3.1 percent to $7.91.
Sears Holdings Corp. shares were off 2.8 percent to $34.18 and American Apparel Inc. pulled back 2.4 percent to 84 cents.
Like many U.S.-based companies vulnerable to the negative impact of the dollar’s strength, Nike Inc. lost 1.9 percent to $94.50 and The Estée Lauder Cos. Inc. declined 1.5 percent to close at $71.75.
Prada SpA led the tracker stocks moving ahead, rising 5.6 percent to 44.65 Hong Kong dollars, or $5.76 at current exchange, and followed closely by Inter Parfums Inc., up 5.4 percent to $25.89. Inter Parfums on Monday brought down its revenue guidance for 2015 based on currency fluctuation but said its earnings were expected to be higher than originally envisioned.
Also on the rise were Samsonite International SA, ahead 5.2 percent to 24.20 Hong Kong dollars, or $3.12, and Quiksilver Inc. was up 4.2 percent to $1.98.
Closing out the top five performers was The Bon-Ton Stores Inc., up 3.6 percent to $5.43.