S&P Drops for Fourth-Straight Day

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The broad S&P 500 fell for the fourth day in a row Wednesday as energy stocks sold off on the back of a profit warning from oil giant Chevron.

Today's Markets

As of 3:20 p.m. ET, the Dow Jones Industrial Average fell 136 points, or 1%, to 13339, the S&P 500 dipped 9.7 points, or 0.67%, to 1432 and the Nasdaq Composite slumped 15.7 points, or 0.51%, to 3049.

Chevron (NYSE:CVX) revealed after the close of trading Monday that its third quarter profits would be substantially lower than the second quarter. The Dow component's shares tumbled more than 4% on the news, shaving close to 40 points from the blue-chip average and weighing heavily on the energy sector.

Alcoa (NYSE:AA) kicked off earnings season after the closing bell on Tuesday with a beat on both the top and bottom lines. However, the blue-chip aluminum giant chopped its 2012 global aluminum demand forecast to 6% from 7%, citing the ongoing “slowdown” in China. The warning sparked fears about the forward outlook for corporate profits.

"Expectations for earnings season are for a general slowdown in revenues, a reflection of the stagnation seen around the world," Chris Beauchamp, a market analyst at IG Index wrote in an email.

Analysts also said a report from the International Monetary Fund suggesting European banks may have to shed between $2.8 trillion and $4.5 trillion in assets as a result of increasing stress on the financial system weighed on sentiment.

The U.S. economy continued expanding modestly in September from August, the Federal Reserve said in its anecdotal Beige Book report. The central bank noted that the residential housing market was showing “widespread improvement,” while consumer spending and manufacturing improved slightly.

Employment conditions were largely unchanged; however, many districts noted that uncertainty from U.S. fiscal policy, the presidential elections and the European debt crisis were restraining hiring.

Also, the Commerce Department said wholesale inventories climbed 0.5% in August from July, matching economists expectations. Later in the day, the Federal Reserve releases its Beige Book. The report provides an anecdotal look at how the economy is faring across the central bank's 12 districts.

Oil futures sold off after posting big gains in the prior session. The benchmark contract traded in New York dipped $1.10, or 1.2%, to $91.29 a gallon. Wholesale New York Harbor gasoline rose 0.02% to $2.961 a gallon.

In metals, gold gained 10 cents, or 0.01%, to $1,765 a troy ounce.

Foreign Markets

The Euro Stoxx 50 fell 0.63% to 2457, the English FTSE 100 dipped 0.58% to 5777 and the German DAX slumped 0.41% to 7205.

In Asia, the Japanese Nikkei 225 sold off by 2% to 8596 and the Chinese Hang Seng edged lower by 0.08% to 20920.