July 8, 2014 / 7:26 PM / 3 years ago

US STOCKS-Wall St falls in broad weakness, Dow below 17,000

* Dow back under 17,000 in broad market decline

* Alcoa to report after market close; revenue seen down

* Internet names among weakest of the day

* Dow off 0.7 pct; S&P 500 down 0.7 pct; Nasdaq off 1.5 pct (Updates to late afternoon, changes byline)

By Chuck Mikolajczak

NEW YORK, July 8 (Reuters) - U.S. stocks fell in a broad selloff on Tuesday, dropping for a second straight session as investors showed caution ahead of the start of earnings season.

The benchmark S&P 500 index, however, recovered from earlier lows and was hovering near its 14-day moving average. That would be a sign of weak near-term momentum if the S&P declined below that level by more than a slight amount. Nine of the 10 primary S&P 500 sector indexes were lower, with only defensive groups like utilities higher for the day.

About 60 percent of stocks trading on the New York Stock Exchange fell, and more than three-fourths of Nasdaq-listed names.

“All the bubble talk eventually gets to people, and with earnings facing us imminently, it’s not a bad time to be a bit more cautious,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

“We haven’t seen a lot of pre-announcements and the ones we have seen were pretty predictable, which probably means earnings are not going to be bad, and they could surprise to the upside. But we think the market is likely to take that a bit in stride and remain a bit cautious here.”

U.S. stocks have performed well recently, with major indexes hitting repeated records and the Dow breaking above 17,000 for the first time ever. The advance has largely come on the back of strong data. Market participants are looking to earnings for confirmation that the economy recovered in the second quarter from the impact of a harsh winter.

In a caveat about consumers, Bill Simon, the chief executive of Wal-Mart’s U.S. division, told Reuters that while the domestic job market was improving, that wasn’t giving consumers enough confidence to boost spending.

Alcoa Inc, among the first high-profile names to report, will release results after the closing bell on Tuesday. The aluminum producer is seen posting profit growth of more than 50 percent, according to Thomson Reuters data, along with a 3.6 percent drop in revenue. Its stock rose 0.5 percent to $14.81.

Profits of S&P 500 companies are expected to grow 6.2 percent in the second quarter, according to Thomson Reuters data, down from the 8.4 percent growth forecast at the start of April. Revenue is seen up 3 percent.

The Dow Jones industrial average fell 117.10 points or 0.69 percent, to 16,907.11. The S&P 500 slid 14.73 points or 0.74 percent, to 1,962.92. The Nasdaq Composite dropped 64.86 points or 1.46 percent, to 4,386.67.

The Dow fell back below the psychologically important 17,000 level. Small-cap stocks underperformed again, dropping for a second straight day. The Russell 2000 fell 1.3 percent in its biggest two-day drop since April.

Weakness in tech shares pressured the Nasdaq, with Internet names especially hit hard. Netflix Inc fell 4 percent to $442.21 while Facebook Inc dropped 4.1 percent to $62.60. TripAdvisor Inc sank 5.6 percent to $101.39.

On the upside, NeuroMetrix Inc jumped 20.3 percent to $2.28 after the U.S. Food and Drug Administration cleared the company’s wearable technology for over-the-counter use in the treatment of chronic pain. (Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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