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US STOCKS-Weak outlooks doom Dow to worst day in 4 months

Caroline Valetkevitch
WATCH LIVE

* Dow off 1.8 pct, S&P off 1.4 pct, Nasdaq off 0.9 pct

* DuPont drops sharply on results, UTX modestly lower

* Apple pares losses after new iPad launch

* About 63 percent of S&P companies miss revenue expectations

NEW YORK, Oct 23 (Reuters) - U.S. stocks fell on Tuesday, driving the Dow industrials to the biggest drop since June 21, as weak results from index members DuPont and United Technologies showed profit growth is slowing.

This earnings season has so far produced a string of disappointments from companies falling short of Wall Street's expectations. With results in from 29 percent of S&P 500 companies, 37 percent have exceeded revenue forecasts, far short of the 62 percent average, and just 57.2 percent of the S&P 500 names reporting so far have beaten earnings forecasts, according to Thomson Reuters data.

That would be the worst percentage of companies beating earnings estimates since the fourth quarter of 2001 - should it stay at the current level, the data showed.

``We've had a series of misses, topped off by DuPont's pretty dismal earnings this morning,'' said Bruce Zaro, chief technical strategist at Delta Global Asset Management, in Boston.

``Expectations were low and results have been coming in generally lower, and that's why we're seeing weakness here,'' he said.

Zaro sees the S&P 500 possibly falling as low as the 1,390 to 1,400 range in the near term.

DuPont's stock lost 9.1 percent to $45.25 after the chemical company reported lower-than-expected quarterly profit and announced 1,500 job cuts. The stock was responsible for a 33-point drag on the Dow, which ended down more than 240 points.

The S&P materials sector index fell 3 percent, largely because of DuPont.

Outlooks have been weak as well. DuPont, United Technologies and 3M Co all cut their outlooks on Tuesday.

Apple's Chief Executive Tim Cook announced the iPad and iPhone maker was launching a smaller, cheaper tablet. Its 8-inch tablet is expected to compete in a market staked out by Amazon.com Inc and Google Inc. Apple shares dropped 3.3 percent to $613.36.

Shares of elevator and air conditioner manufacturer United Technologies were down 1 percent at $77.07 while 3M shares were down 4.1 percent at $88.73.

The Dow Jones industrial average slid 243.36 points, or 1.82 percent, to 13,102.53 at the close. The Standard & Poor's 500 Index fell 20.71 points, or 1.44 percent, to 1,413.11. The Nasdaq Composite Index dropped 26.49 points, or 0.88 percent, to end at 2,990.46.

One outlier from the day's losses was United Parcel Service , which gained 3 percent to $73.73 despite earnings that were viewed by some as disappointing. The Dow Jones Transportation Average rose 0.9 percent.

Overall earnings for S&P 500 companies are expected to fall 2.5 percent in the third quarter from a year ago, Thomson Reuters data showed.

In a development reviving investors' worry about Europe, Moody's downgraded five key Spanish regions by one or two notches late on Monday, citing their limited cash reserves and forthcoming bond repayments.