| NEW YORK
NEW YORK Global shares tumbled and the euro hit a one-week low versus the dollar on Tuesday after weak U.S. corporate earnings results and downgrades of several indebted regions of Spain raised concerns about the global economy.
The Dow Jones industrial average posted its biggest point drop since June, shedding over 240 points, as large multinational companies including Dupont (DD.N) and United Technologies (UTX.N) reported disappointing profits and earnings outlooks.
The euro fell as low as $1.2950, its lowest level against the dollar since October 16. It last traded at $1.2964, down 0.7 percent on the day. The euro also dropped against the yen as Spain's borrowing costs spiked after rating agency Moody's downgraded five of the country's regions, including economically important but deeply indebted Catalonia.
The decline in U.S. stock prices was broad, with all 10 of the S&P 500's sectors down. Dupont shares fell 9.1 percent to $45.23 after the chemical maker slashed its earnings forecast and reported disappointing quarterly results.
"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 possibly falling as low as the 1,390 to 1,400 range in the near term.
The Dow Jones industrial average .DJI ended down 243.36 points, or 1.82 percent, at 13,102.53. The Standard & Poor's 500 Index .SPX finished down 20.71 points, or 1.44 percent, at 1,413.11. The Nasdaq Composite Index .IXIC closed down 26.49 points, or 0.88 percent, at 2,990.46.
Apple Inc (AAPL.O) took the wraps off a 7.9-inch tablet on Tuesday in its biggest product move since debuting the iPad two years ago. Its "iPad mini" marks Apple's first foray into the smaller tablet segment. Apple's shares were down 3.3 percent at $613.35 in a day of very volatile trade.
Global shares .MIWD00000PUS fell 1.5 percent.
In Europe, the FTSEurofirst 300 index .FTEU3 ended down 1.7 percent at 1,088.71, its lowest close since September 5.
The euro zone's blue-chip Euro STOXX 50 index .STOXX50E fell 2.1 percent to 2,477.92, while the Euro STOXX 50 implied volatility index .V2TX rose 10 percent, highlighting investors' concerns over the market outlook.
Tuesday was the worst day for euro zone stocks and the biggest rise for implied volatility since September 26, when violent anti-austerity protests hit Spain and Greece.
On Wall Street, the Dow and the S&P 500 indexes have given up all of their gains since the European Central Bank's Sept 6. announcement of a plan to buy bonds of troubled euro zone nations.
The S&P 500 was below its 50-day moving average of about 1,434, which had been a level of support and may now act as resistance if the market is able to rebound.
U.S. EARNINGS DISAPPOINT
A total of 145 of the S&P 500 .SPX companies have reported results so far. Sixty-three percent have missed analysts' expectations for revenue. By contrast, since 1994 an average of 62 percent of companies have exceeded estimates. Over the past four quarters 55 percent of companies have beaten.
Overall earnings for S&P 500 stock index companies are expected to fall 2.5 percent in the third quarter from a year ago.
After the bell, Facebook Inc (FB.O) said its revenue rose 32 percent in the third quarter to $1.26 billion. The world's No.1 online social network firm posted revenue of $954 million in the year-ago period.
Also after the bell, Video rental service Netflix Inc (NFLX.O) posted a third-quarter profit as the addition of new streaming subscribers in the United States lifted revenue. But the stock fell 15 percent in extended trade.
SPAIN'S ECONOMY CONTRACTS AGAIN
In other European news, the Spanish economy, the fourth largest in the euro zone, contracted in the third quarter. according to the country's central bank.
The euro plunged versus the yen and hit a one-week low versus the dollar.
Financial markets are still waiting for a fiscal bailout request from Spain to trigger the European Central Bank's new bond-buying program, which many believe would draw a line under any threat of default from the euro zone's fourth-largest economy.
Yves Mersch, who has been nominated to serve on the ECB's Executive Board, told an audience in Berlin that while there was no limit to the amount of bonds the ECB could buy, there was a time limit.
Shortly before he spoke, Spain sold short-term debt, with yields rising slightly on three-month paper and falling on six-month paper.
Meanwhile, data showed business morale in France's manufacturing sector slumped to its lowest in over two years.
The data fueled fears that France, the euro zone's second-largest economy, may be on the brink of a recession, according to Joe Manimbo, senior market analyst, Western Union Business Solutions in Washington D.C.
BERNANKE ERA MAY BE CLOSING
In the United State, the Federal Reserve's policy committee began a two-day meeting on Tuesday.
The Federal Open Market Committee is likely to hold off from taking fresh steps, opting to review the impact of the significant action it took last month and keep a low profile in its last gathering before the November 6 elections.
The New York Times reported Fed Chairman Ben Bernanke has told close friends he probably will not stand for a third term at the U.S. central bank even if President Barack Obama wins the November 6 election.
Oil prices fell as commodity and equity prices were pressured by concerns about slowing global economic growth. Brent crude for December delivery fell $1.19, or 1.09 percent, to settle at $108.25 a barrel. U.S. December crude settled down $1.98, or 2.23 percent, at $86.67 a barrel.
The benchmark 10-year U.S. Treasury note was up 16/32 in price, with the yield at 1.759 percent.
(Additional reporting by Atossa Araxia Abrahamian; Editing by Clive McKeef, Leslie Adler and James Dalgleish)