While you were sleeping: UPDATED Stocks drop as Alcoa result falls short

Wall Street dropped after Alcoa kicked off the US third quarter earnings season with a result that missed estimates and produced an outlook that fell short of expectations.

"Alcoa is always the first off and seen as a bellwether for industrial demand," St. Louis-based EverBank's world markets president Chris Gaffney told Bloomberg.

"People need to see strong earnings, especially with the thought that rates will start moving higher. The environment for companies is going to get less accommodating. The drivers today and going forward are going to be earnings."

Shares of Alcoa were down 11% at the close.

"You are coming up against very low expectations, which means the bar is already low," Sarhan Capital chief executive Adam Sarhan told Reuters. "If you can't match those expectations, then investors are going to quickly move to the exit."

The Dow Jones Industrial Average shed 200.38 points, ot 1.1%, to 18,128.66. The Nasdaq Composite Index retreated 1.5% to 5246.79, while the Standard & Poor's 500 Index declined 1.2% to 2136.73.

Apple gains from Samsung's trouble
The Dow fell, led by slides in Merck and Intel shares, down 2.9% and 2.8% respectively. Shares of Apple bucked the trend, eking out a 0.2% gain, as rival Samsung Electronics said it had stopped production of its fire-prone Galaxy Note 7 smart phone.

"This is the first time that I have seen a product recall go this badly wrong," financial analyst Richard Windsor told clients, Reuters reported. "When it comes to the damage that it will do to Samsung's brand, we are in uncharted territory."

Also bucking the trend were Tyson Foods shares, which traded 1.25% higher. The US meat company agreed to buy a 5% stake in Beyond Meat, a producer of plant-based protein. The terms of the agreement were not disclosed.

"We're enthusiastic about this investment, which gives us exposure to a fast-growing segment of the protein market," Tyson Foods' executive vice-president of strategy and new ventures Monica McGurk says.

"It meets our desire to offer consumers choices and to consider how we can serve an ever-growing and diverse global population, while remaining focused on our core prepared foods and animal protein businesses."

Shares of Illumina tumbled 25% after the gene-sequencing company cut its revenue guidance. 

Oil falls on glut report
US crude oil fell 1.1% to $US50.79 a barrel after a report from the International Energy Agency suggested global supplies rose in September.

In Europe, the Stoxx 600 Index finished the session with a drop of 0.5%. The UK's FTSE 100 Index and Germany's DAX Index each slid 0.4%, while France's CAC 40 Index gave up 0.6%.

The UK pound dropped, trading 1.8% weaker against the US dollar after sliding to $US1.2090 earlier in the day, as Bank of England policy makers exacerbated concern negotiations to exit the European Union will further hurt the currency.

"The sentiment on sterling is closely tied to expectations of hard Brexit," Amsterdam-based ABN Amro currency and commodity strategist Georgette Boele told Bloomberg.

(BusinessDesk)

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