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The markets fell Tuesday as traders cautiously awaited Alcoa's results after the bell, marking the beginning of fourth-quarter earnings season.
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As of 3:10 p.m. ET, the Dow Jones Industrial Average fell 55.7 points, or 0.42%, to 13328, the S&P 500 dipped 5.5 points, or 0.38%, to 1456 and the Nasdaq Composite slipped 8.3 points, or 0.27%, to 3091.
Boeing (NYSE:BA) was the biggest Dow laggard by as worries mounted about the airplane maker's 787 Dreamliner plane. The stock fell 2% and cost the Dow some 16 points on its own. Other blue-chip underperformers included Verizon Communications (NYSE:VZ) and AT&T (NYSE:T). Balancing those out, Hewlett-Packard (NYSE:HPQ) and Home Depot (NYSE:HD) posted gains.
With the drama in Congress on the back burner for the moment, traders are bracing for the flood of quarterly earnings reports due to start Tuesday. Alcoa (NYSE:AA), the blue-chip aluminum maker, is expected to post earnings of six cents a share on sales of $5.6 billion after the closing bell.
Analysts struck a cautious tone heading into earnings season.
"We suspect earnings season will be a negative for the market overall," Barry Knapp, an analyst at Barclays wrote in a note to clients. He notes that revenue performance could stabilize this quarter after sales repeatedly surprised to the downside during the third quarter. However, he warns that companies' forward guidance could surprise market participants.
On the European front, the unemployment rate in the eurozone ticked up by 0.1-percentage point in November to 11.8% -- a record high as the economy there continues reeling from the debt crisis.
Oil futures inched lower. The benchmark crude oil contract fell 4 cents, or 0.04%, to $93.15 a barrel. Wholesale New York Harbor gasoline rose 0.61% to $2.794 a gallon. In metals, gold rallied $15.90, or 0.97%, to $1,662 a troy ounce.
The Euro Stoxx 50 fell 0.15% to 2691, the English FTSE 100 dipped 0.18% to 6054 and the German DAX edged lower by 0.48% to 7696.
In Asia, the Japanese Nikkei 225 slumped 0.86% to 10508 and the Chinese Hang Seng sold off by 0.94% to 23111.