U.S. stocks dropped on Tuesday after another steep fall in oil prices and a disappointing spending forecast from Exxon Mobil. Shares of Exxon (XOM.N) fell 2.2 percent to $74.59 after the oil major reported its smallest quarterly profit in more than a decade, forecast a 25-percent drop in capital spending from 2015 levels and suspended share repurchases. With Exxon, "not only did the earnings disappoint people, but the fact that they slashed capex so much and they (suspended) their share repurchase program. It's a good indication that one more large oil company is not seeing an improvement in the environment," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. Data so far this earnings period shows the capital spending slump that originated in the hard-hit energy sector was spreading more widely across other U.S. industries. Earlier Tuesday, BP Plc (BP.N) reported an annual loss of $6.5 billion, its largest ever. The S&P energy index .SPNY slid 3.3 percent, the biggest drag on the S&P 500. Oil prices CLc1 LCOc1 slid sharply as hopes faded for a deal between OPEC and Russia to cut output. The S&P utility index .SPLRCU rose 0.4 percent, the only sector to end in positive territory. The Dow Jones industrial average .DJI closed down 295.64 points, or 1.8 percent, to 16,153.54, the S&P 500 .SPX lost 36.35 points, or 1.87 percent, to 1,903.03 and the Nasdaq Composite .IXIC dropped 103.42 points, or 2.24 percent, to 4,516.95. The Dow Jones transportation average .DJT ended 2.9 percent lower following news of the first U.S. transmission of the Zika virus. The S&P 500 is down 6.9 percent since the start of the year. Investors have been concerned about a China-led global economic slowdown, tepid U.S. economic data, the pace of interest rate hikes by the Federal Reserve and weak earnings. Fourth-quarter S&P 500 earnings are expected to have fallen 4.4 percent from a year earlier, according to Thomson Reuters data. Bucking the day's trend, Alphabet (GOOGL.O) was up 1.3 percent at $780.91. Quarterly profit beat estimates late Monday and the Internet major surpassed Apple (AAPL.O) as the most valuable U.S. company. After the bell, shares of Chipotle (CMG.N) fell 3 percent after it reported its first fall in quarterly sales at established restaurants since it went public. The stock ended the regular session up 0.6 percent at $475.67. Also, Yahoo (YHOO.O) dipped 1 percent in extended trading following its results. Investors are keeping an eye on the U.S. election cycle. Iowa results created greater uncertainty because there were no clear winners, said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey. "The bottom line for people who are investing is they prefer a little more certainty than they are seeing right now in either the election or in the energy markets," he said. About 8.5 billion shares changed hands on U.S. exchanges, below the 9.2 billion daily average for the past 20 trading days, according to Thomson Reuters data. NYSE declining issues outnumbered advancers 2,478 to 603 and on the Nasdaq, 2,237 issues fell and 577 advanced. The S&P 500 posted 15 new 52-week highs and 28 lows; the Nasdaq recorded 22 new highs and 143 lows. Source: Reuters
