NEW YORK: US stocks fell Tuesday as the aura of the Federal Reserve's new QE3 stimulus wore off and worries about company profits began to set in, with FedEx cutting its forecast for this year and next.
Downgrades hit the shares of Alcoa, AMD, and Abbott Laboratories, but losses were widespread on the trading boards.
In the first half hour of trade, the Dow Jones Industrial Average fell 10.64 points (0.08 percent) to 13,542.46.
The S&P 500 lost 3.14 (0.21 percent) to 1,458.05, while the tech-rich Nasdaq dropped 3.08 points (0.10 percent) to 3,175.59.
"Energy and financials are weaker as yesterday's risk-off trade extends into today's session. Telecoms, health care, and consumer staple stocks are showing relative strength as they attempt to stay positive," said analysts at Briefing.com.
FedEx turned in a better-than-expected fiscal first quarter but cut its forecast for this year and next, sending its shares down by 2.2 percent.
Alcoa shares fell 1.2 percent after being downgraded to "hold" by analysts at Jefferies.
AMD, whose chief financial officer announced he was resigning, tumbled 5.7 percent as BOM Capital Markets cut its earnings forecast for the company.
Graphic chip specialist Nvidia was up 0.2 percent despite being cut to "sector perform" by RBC analysts, while Abbott lost 0.3 percent following Leerink Swann's downgrade.
Apple topped $700 for the first time in regular trade, buoyed by strong orders for its new iPhone 5, making the world's largest company by market capitalization worth some $656 billion.
Bond prices climbed again as the dollar headed higher against the euro. The yield on the 10-year Treasury fell to 1.79 percent from 1.84 percent Monday, while the 30-year dropped to 2.98 percent from 3.03 percent. Bond yields move inversely to prices.
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