For the second time in just three trading days, the Dow Jones Industrial Average (^DJI 0.07%) posted its worst one-day drop since June. A slew of poor earnings reports at home and renewed concerns about Spain combined to send the blue chips down 243 points, or 1.8%, to finish at 13,103. The market's two other major indexes, the S&P 500 and Nasdaq, were down but not as sharply, losing 1.4% and 0.9%, respectively.
Before today's trading session even began, trouble was lurking from abroad as major markets in Europe all fell 1.4% or more on news that Spain's economy contracted in the third quarter by 0.4%, its fifth consecutive quarter of negative growth. Credit ratings for a number of Spanish provinces were also cut to junk. The news could push the Iberian country closer to requesting a bailout from the eurozone, a prospect that investors have cheered in the past despite its unknown consequences. Nevertheless, a continuing recession is a bad sign. Spain's leaders have insisted they don't need the economic injection, but a shrinking GDP and unemployment near 25% could leave them no choice.
Back at home, lackluster earnings from three Dow components this morning only added insult to injury. Chemical-maker DuPont (DD +0.00%) fell a whopping 9% after announcing that it will cut 1,500 jobs and reporting that weakness in solar-panel demand and for titanium oxide, an industrial pigment used for whitening, took a big bite out of earnings. The seed maker tallied adjusted earnings of $0.44 per share, down from $0.69 a year ago, and $0.02 short of analyst estimates. Revenue from continuing operations dropped 9% to $7.4 billion. Outside solar and titanium oxide, volumes increased by 3%, and the company maintained its 2012 EPS guidance of $3.25 to $3.30.
Fellow conglomerate 3M (MMM +2.36%) didn't fare much better, as its shares fell 4.1%. The maker of products such as the Post-It Note cut its 2012 guidance to a range of $6.27 to 6.35 a share from a range of $6.35 to $6.50 in response to "current economic realities." Because of negative currency translation, the company projected that revenue growth would be flat for the year. EPS of $1.65 for the quarter matched expectations, but revenue of $7.5 billion fell about 2% short.
Compared with the other two Dow stocks reporting, United Technologies (UTX 0.59%) looked like a star, as shares were off only 1% by the end of the day. The maker of Otis elevators and other industrial equipment said earnings dropped by 3% on currency weakness to $1.37 a share, but additional profits from its recent acquisition of aerospace supplier Goodrich helped it beat estimates by $0.18. Revenue, on the other hand, climbed 5.7% higher to $15 billion, but that was still short of expectations of $15.5 billion. United also said it expected to hit the low end of its previous sales forecast of $58 billion to $59 billion and left earnings guidance unchanged at $5.25 to $5.35.
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