Image source: Getty Images.

Stocks fell on Tuesday as third-quarter earnings season kicked off on a sour note. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) indexes both fell by more than a percentage point. 

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Most of the broadly owned exchange-traded funds declined. The United States Oil Fund ETF (NYSEMKT:USO), for example, ticked down by 1% as crude oil prices fell. Meanwhile, the iShares MSCI Emerging Markets Index (NYSEMKT:EEM) slipped by 2% after hitting a one-year high on the previous trading session. 

As for individual stocks, Illumina (NASDAQ:ILMN) and Seagate Technology (NASDAQ:STX) were two of the market's biggest movers as both stocks fell following quarterly earnings updates.

Illumina lowers its outlook

Illumina shares lost one-quarter of their value after warning of a surprising growth slowdown ahead. In a preliminary update on its fiscal third quarter, the genetic testing equipment specialist revealed that revenue will be $607 million this quarter, which is significantly lower than the $623 million that executives forecast in late July. The scale of the miss isn't particularly bad: $607 million in revenue amounts to 10% higher sales, compared to the 12% increase executives targeted and the 11% uptick that Illumina logged in the prior quarter.

However, the company explained that the shortfall came from a large drop in sales for its high-throughput sequencing instruments. These are expensive machines and even a few less orders than expected can drive big swings in Illumina's overall sales figures. Management doesn't see this dip as simply a matter of a few big contracts slipping from one period into the next, though. Instead, executives are bracing for that demand weakness to continue into the next quarter. Sales in Q4 will be "flat to slightly up" from Q3's $607 million result, Illumina said in a press release. Consensus estimates were looking for closer to $684 million to finish the fiscal year, and so it makes sense that the stock would fall in response to this slowdown relative to expectations.

Seagate Technology hits its numbers

Hard drive maker Seagate fell 8% despite positive news from the company on its latest quarterly operating results. Revenue will weigh in at $2.8 billion as gross profit margin holds steady at 29% of sales this quarter, executives said as part of a preliminary quarterly earnings release. That compares to management's early August forecast of at least $2.7 billion of sales and at least a 27% profit margin. "Our strong results reflect persistent growth and demand for cloud-based storage exabyte capacity and our new high-capacity HDD products are gaining traction in the marketplace," CEO Steve Luczo said in a press release. 

Image source: Getty Images.

Seagate's cost-cutting program also appears to be paying dividends by holding down growth in operating expenses. The company aims to lay off nearly 7,000 employees, which should help it achieve gross profit margin of around 30% over time. Tuesday's release shows that this target is within reach, especially since the restructuring "continue to progress as planned," according to management.

Overall, there's nothing in the release to suggest a weakening of Seagate's growth prospects or finances. Instead, the stock's drop seems to be more about investors taking a step back after shares surged higher in the past few months (the stock is up 84% since May). Long-term investors can ignore fluctuations like these and look forward to more details from Seagate, including an updated outlook, when its full results are published before the market opens on Oct. 19.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.