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Market Recap: Bleak IMF Report Drives Stocks Down

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Markets closed down today:

▼ Dow: -0.81 percent

▼ Nasdaq: -1.52 percent

▼ S&P: -0.99 percent

Precious metals:

▼ Gold: -0.62 percent to $1,765.10 an ounce

▼Silver: -0.42 percent to settle at $33.88

Commodities:

▲ Oil: +2.89 percent

Stocks were down because:

Stocks slumped Tuesday on Wall Street after the International Monetary Fund predicted weaker world economic growth and as investors waited for what they expected to be lower corporate earnings.

The Dow Jones industrial average declined 110.12 points, or 0.8 percent, to 13,473.53. The Standard & Poor's 500 index dropped 14.40 points, a hair under 1 percent, to 1,441.48.

The Nasdaq composite index lost 47.33 points, or 1.5 percent, to 3,065.02.

The slide came on the five-year anniversary of record high closes for the Dow and S&P 500. The Dow is about 700 points off its all-time high, 14,164.53. It would take a 5 percent rally from here to reach the record.

Investors were discouraged by an International Monetary Fund report released overnight that said the global economy was weakening and the downturn afflicting developing nations has begun to spread.

The weak forecast came one day after the World Bank cut its estimate for growth in China, the world's second-largest economy, and for developing countries across Asia.

The IMF forecasts that the world economy will expand 3.3 percent this year, down from the estimate of 3.5 percent growth it issued in July. Its forecast for growth in 2013 is 3.6 percent, down from 4.1 percent in April.

After the market closed, Alcoa, the aluminum company, said it earned 3 cents per share in the most recent quarter after accounting for special charges. Wall Street was expecting break-even.

Alcoa stock ended the regular trading day up a penny at $9.13 and gained an additional 7 cents in the first half-hour after the earnings report. Alcoa is the first of the 30 stocks in the Dow to report earnings.

Overall, analysts expect earnings at S&P 500 companies to be down compared with last year, the first decline in almost three years.

Earlier Tuesday, the National Federation of Independent Business reported that business owners became increasingly pessimistic during September because of the weak hiring environment and poor sales.

Nonetheless, the number of owners who expect business conditions to improve in six months gained four percentage points. Those believing it's a good time to expand rose three percentage points.

Only energy stocks kept the market from closing even lower. The price of crude oil jumped more than $3 per barrel to $92.39 because of supply concerns in the Middle East and the North Sea.

Energy stocks were the only major group in the S&P 500 to finish higher, and just barely. So-called consumer discretionary stocks, including companies like hotels and luxury stores that depend on a healthy economy, fell 1.5 percent as a group.

The yield on the 10-year Treasury note fell to 1.72 percent from 1.74 percent late Friday. U.S. government bond trading was closed Monday for the Columbus Day holiday.

European markets also fell. Benchmark indexes fell 0.8 percent in Germany and 0.5 percent Britain. France's stock market index fell 0.7 percent.

The AP contributed to this report.

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