NEW YORK — Stocks closed with steep losses Tuesday after disappointing corporate earnings and reports that a key meeting of European financial ministers had been canceled. Assets that tend to hold their value in a weak economy such as U.S. government debt and gold rose.
The Dow Jones industrial average lost 207 points. It had gained 409 points over the previous three days.
Manufacturing conglomerate 3M cut its 2011 earnings forecast, and U.S. Steel warned that demand for its products could slow. Netflix plunged 35 percent after the company cut its profit forecast and said it is losing subscribers after a price increase in July. After the market closed, Amazon Inc. plunged 17 percent after its earnings came in far below Wall Street’s forecasts.
The market also was pulled lower by a report that consumer confidence plunged in October to the lowest level since March 2009. The Conference Board index measures how shoppers feel about business conditions, the job market and their outlook for the next six months.
“It’s hard to parse this data and find any way that you can glean something positive about it,” said Tim Speiss, vice president at EisnerAmper Wealth Planning.
The Dow fell 207 points, or 1.7 percent, to close at 11,706.62. 3M fell 6.3 percent, the largest drop among the 30 stocks that make up the Dow average.
The Standard & Poor’s 500 index fell 25.14, or 2 percent, to 1,229.05. The Nasdaq dropped 61.02, or 2.3 percent, to 2,638.42.
The losses turned the Nasdaq negative for the year once again. A rally Monday left the index up 1.8 percent for 2011.
Small-company stocks fell far more than the broader market, a sign that investors were shunning assets perceived as risky.
The Russell 2000, an index of small companies, plunged 3 percent, reversing a gain of 3.3 percent Monday.
The yield on 10-year Treasury notes fell to 2.14 percent from 2.23 percent late Monday. Bond yields fall when investors send their prices higher. Gold rose 2.9 percent.
The latest headlines from Europe cast doubt over whether leaders there can agree on a comprehensive solution for the region’s debt crisis in time for a summit today. Europe’s ongoing debt crisis has been behind much of the market’s big moves lately.
“There’s always a concern about what is going to happen with Europe and how they are going to put together a deal that satisfies everyone. The bottom line is investors in Greek paper shouldn’t be thinking about a haircut; they should be worried about getting scalped,” said Robert Pavlik, chief market strategist at Banyan Partners. “While earnings have been good, two big names came out with misses — 3M and Cummins. Put that on top of the collapse of Netflix, and people are taking profits.”
