Wires

US STOCKS-Wall St edges down as Alcoa, Chevron weigh

* Alcoa beats expectations but cautions of slowdown

* Yum Brands defies China sluggish growth, raises outlook

* True Religion exploring sale, shares jump

* Indexes: Dow off 0.31 pct, S&P off 0.13 pct, Nasdaq up0.04 pct

(Updates with open)By Chuck Mikolajczak

NEW YORK, Oct 10 (Reuters) - U.S. stocks dipped on Wednesdayas earnings season began with Alcoa forecasting slower demandfor aluminum, while a profit warning from Chevron weighed on theenergy sector.

But declines were muted as Yum Brands Inc

, climbed 8percent to $70.99 and was the best performer on the S&P 500. Theparent company of KFC and other fast-food restaurants raised itsfull-year outlook after sales in China held up despite slowingChinese growth.

The overall tone at the start of the earnings season wasdownbeat, however. The S&P 500 index was on pace for its fourthday of declines over concern the global economic slowdown washurting profits and causing companies to lower their outlooks.The index was testing the technical support level of 1,440.

Stronger demand from airplane and automobile producershelped Alcoa

, the largest U.S. aluminum producer, toreport third-quarter results that beat analysts' expectations.Still, Alcoa fell 3.1 percent to $8.85 as the biggest percentagedecliner on the Dow.

Chevron Corp

dipped 3 percent to $113.80 as thebiggest drag on the S&P 500 after the second-largest U.S. oilcompany warned third-quarter profits would be "substantiallylower" than in the previous quarter. Chevron said a hurricaneand maintenance curbed its oil and gas output and a fire hit itsrefining operation.

Lackluster growth in China, the world's second-largesteconomy, is expected to rein in corporate earnings in the thirdquarter and dent profit forecasts as the Asian nation feels thepinch of the debt crisis in the euro zone, a key tradingpartner.

"You've seen very cautionary earnings results and evenforward guidance. Alcoa has good earnings, but their forwardguidance is lackluster. It points to a slow China and slowglobal growth," said Richard Weeks, managing director atHighTower Advisors in Vienna, Virginia.

The Dow Jones industrial average

dropped 42.05points, or 0.31 percent, to 13,431.48. The Standard & Poor's 500Index

shed 1.83 points, or 0.13 percent, to 1,439.65. TheNasdaq Composite Indexgained 1.18 points, or 0.04percent, to 3,066.21.

The International Monetary Fund and the World Bank haverecently cut world growth forecasts, citing concerns aboutChina's slowdown.

Engine maker Cummins Inc

lowered its 2012 forecastfor a second time this year, citing delays in customer spendingdue to a weakening global economy, and said it would cut up to1500 jobs. Cummins shares dropped 2.6 percent to $88.45.

The cautious outlooks are the latest in a string offorecasts from large multinational companies, including FedExCorp

, Caterpillar Incand Hewlett-Packatrd Co.

Analysts forecast third-quarter earnings of Wall Street'sS&P 500

companies would fall 2.3 percent from theyear-ago quarter, according to Thomson Reuters data, which wouldbe the first drop in U.S. quarterly earnings in three years.

According to data through Tuesday, 94 companies in thebenchmark S&P index have issued negative outlooks, compared with23 positive pre-announcements, for a ratio of 4.1, the weakestshowing since the third quarter of 2001.

FedEx

said it plans to slash costs at itsunderperforming express air freight and services divisions, withprofit improvements of $1.7 billion planned at those operationsover the next four years. Shares gained 5.5 percent to $90.30.

U.S. data showed wholesale inventories rose 0.5 percent, asexpected, in August. Investors will also look to the FederalReserve's Beige Book at 2 p.m (1800 GMT) for the U.S. centralbank's assessment of the economy.

Earnings from warehouse chain Costco Wholesale Corp

were a bright spot as the company reported a 27 percent jump inquarterly profit on higher sales and membership fees. Costcoshares were up 4 percent to $103.60.

True Religion Apparel Inc

surged 22.2 percent to$25.67 after the denim maker said it was evaluating strategicalternatives, which could include a possible sale of thecompany, after receiving indications of interest from thirdparties.

(Editing by Kenneth Barry)

((charles.mikolajczak@thomsonreuters.com)(+1 646 2235234)(Reuters Messaging:charles.mikolajczak.thomsonreuters.com@reuters.net))

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