Wall Street Opens Lower as Traders Brace for Earnings

U.S. stocks are falling in morning trading Tuesday as investors await corporate earnings reports this week. Tech and small companies fell sharply. The Dow Jones industrial average dropped below 17,000 for the first time since crossing that threshold last week on news that employers have been hiring more.

KEEPING SCORE: The Dow fell 117 points, or 0.7 percent, to 16,905 as of 11:15 a.m. Eastern time. The Nasdaq composite fell 63 points, or 1.4 percent, to 4,387. The Standard & Poor's 500 fell 14 points, or 0.7 percent, to 1,963.

Investors sought out defensive stocks. Utilities rose 0.5 percent, one of just two sectors of the 10 in the S&P 500 that rose. Telecommunications stocks fell the most, 1.4 percent. The Russell 2000, which tracks small-company stocks, fell 17 points, or 1.5 percent, to 1,169.

EARNINGS WATCH: Investors are watching second-quarter earnings reports for clues about the strength of the U.S. economy. The reports begin in earnest when Alcoa reports its quarterly results after the U.S. stock market closes Tuesday. Wells Fargo, the No. 1 home mortgage lender in the U.S., reports Friday.

Financial analysts expect earnings per share for the S&P 500 to have risen 6.5 percent from a year earlier, according to S&P Capital IQ, a research firm. That is about double the increase in the first quarter. They expect earnings growth to accelerate for the rest of the year, topping 11 percent in the fourth quarter.

DEAL SWEETENER: Drugmaker AbbVie fell $1.48, or 2.6 percent, to $55.92 after news that it boosted its offer to buy another drug company, Shire. The target, known for its rare-disease drugs, has rejected three AbbVie offers.

EUROPE: France's CAC-40 and Germany's DAX fell 1 percent each. Britain's FTSE 100 dropped 0.9 percent.

ASIA: Japan's Nikkei 225 index slipped 0.4 percent. Hong Kong's Hang Seng ended flat. China is due to release inflation figures, which are a key indicator for both policy and economic performance, on Wednesday. Meanwhile, investors are also watching for the outcome of a presidential election Thursday in Indonesia, the world's most populous Muslim nation and its third-largest democracy.

BONDS AND OIL: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.57 percent from 2.61 percent late Monday. In energy markets, U.S. crude for August delivery fell two cents to $103.50.