* Tech leads losses after downgrades, Apple slides
* Alcoa to start earnings season after the close
* IMF cuts growth forecasts
* Dow off 0.6 pct, S&P 500 off 0.7 pct, Nasdaq off 1.2 pct
By Atossa Araxia Abrahamian
NEW YORK, Oct 9 U.S. stocks fell on Tuesday, led
by losses in technology after brokerage downgrades of Intel
and other major companies amid worries about
third-quarter U.S. earnings.
Shares of Intel, the world's largest semiconductor maker,
lost 2.7 percent to $21.91 after negative reports by at least
two brokerages. Robert W. Baird & Co cut its price target for
Intel, citing weak demand for notebooks.
The news ignited a bit of selling sentiment across the board
in large-cap technology shares, including Apple, which has been
under pressure in recent weeks.
Michael James, senior trader at Wedbush Morgan in Los
Angeles, points to Apple's relative underperformance in recent
weeks as the main cause of the decline in tech stocks.
"Since Apple is 20 percent of the Nasdaq, there's a
spillover in tech stocks in general. The Intel downgrade and the
semiconductor stock performance have made people cautious,"
Apple's stock cut most of its earlier losses and was down
just 0.2 percent at $637.10 in mid-afternoon trading.
Microsoft shares lost 1.6 percent to $29.31 and
ranked as the biggest drag on the Nasdaq.
Shares of Netflix slid 9.3 percent to $66.63 after
Bank of America Merrill Lynch cut the video streaming company's
stock to "underperform" from "buy."
The PHLX semiconductor index tumbled 1.5 percent.
Chinese Internet company Baidu was also downgraded
by Credit Suisse to "underperform" from "neutral." Its shares
shed 7 percent to $106.29.
Analysts expect earnings reports for S&P 500 companies to
show a drop of about 2.4 percent on a year-over-year basis,
according to Thomson Reuters data. This would mark the first
quarterly drop in three years for S&P 500 companies' earnings.
Such warnings about earnings have left investors cautious
after a rally that has driven the S&P 500 up nearly 16 percent
so far in 2012, lifting it to an almost five-year high.
"Stocks had a big move for the year. Now people are waiting
for more clarity on third-quarter results and fourth-quarter
guidance," James said, adding that Monday's light trading volume
increased stock volatility just ahead of earnings season.
The Dow Jones industrial average dropped 84.95
points, or 0.63 percent, to 13,498.70. The Standard & Poor's 500
Index slipped 10.37 points, or 0.71 percent, to 1,445.51.
The Nasdaq Composite Index fell 37.41 points, or 1.20
percent, to 3,074.94.
Earnings season will begin when Dow component Alcoa Inc
reports quarterly results after Tuesday's closing bell.
Analysts expect Alcoa's third-quarter results to show the
aluminum company broke even, down from a profit of 15 cents per
share a year earlier, according to Thomson Reuters data.
"Everyone is waiting to find out what Alcoa says after the
bell," said John Petrides, portfolio manager with Advisors
Capital Management in Hasbrouck Heights, New Jersey.
"Alcoa does a very good job of outlining global growth:
They're in every big significant market, and they give a good
read into whats going on in the global economy," he added.
Shares of Alcoa shot up 1.1 percent to $9.22.
Among other large multinationals that have warned about
earnings, citing weak demand in Europe and China, are FedEx Corp
, Caterpillar Inc and Hewlett-Packard Co.
FedEx shares shed 0.7 percent to $85.73, while Caterpillar's
stock lost 0.8 percent to $84.76. HP shares fell 0.9 percent to