After Market: Summer Earnings Season Opens with a Clunk

Wall Street suddenly got cautious just as earnings season got underway, and momentum stocks got clobbered Tuesday. Alcoa (AA), whose report marks the unofficial start of each earnings season, released its numbers after the bell, and then gained 0.75 percent. But the Dow Jones industrial average (^DJI) dropped 117 points, the tech heavy Nasdaq composite (^IXIC) slipped 60 points, and the Standard & Poor's 500 index (^GPSC) was down 13 points.

Momentum stocks -- in this case, mainly Internet and biotech stocks -- got hammered. (CRM) was down more than 4 percent, Tripadvisor (TRIP) fell 5.5 percent, Netflix (NFLX) dropped more than 3 percent, Facebook (FB) was down close to 4 percent, and Tenet Healthcare (THC) lost 2.5 percent. First Solar (FSLR) was another big loser, down almost 5 percent.

And even an analyst upgrade for Groupon (GRPN) from neutral to buy failed to help the stock. It dropped more than 2.5 percent.

Airline stocks were hit with another day of selling. Delta (DAL) fell more than 1 percent, Southwest (LUV) dropped more than 1.5 percent, and JetBlue (JBLU) was lower by more than 1 percent. But United Continental (UAL) bucked the trend, gaining more than 2 percent. Analysts say the sell-off in the airline sector is overdone, but investors clearly aren't convinced. Delta is down by 9 percent over the past five days.

And cupcake maker Crumbs Bake Shop (CRMB) fell apart dropping 71 percent. The company announced it is shuttering all of its stores because of plummeting sales.

PetSmart (PETM) fell slightly a day after rallying. News recently broke that major investor Longview Asset Management wants the company to sell itself. Over the past 5 days, the stock is up 13 percent.

AbbVie (ABBV) upped its bid for U.K. biopharma company Shire by 11 percent and AbbVie's stock dropped 3 percent.

Pharma company Mylan (MYL) also fell slightly after announcing it has launched a generic product to fight hypertension.

And finally, botox maker Allergan (AGN) bucked the downward trend, gaining slightly a day after activist investor Bill Ackman proposed bringing in a new group of directors.

-Produced by Karina Huber.

What to Watch Wednesday:

  • The Mortgage Bankers Association releases weekly mortgage applications at 7 a.m. Eastern time.

  • The Federal Reserve releases minutes from its June interest rate meeting at 2 p.m.

  • WD-40 Co. (WDFC) releases quarterly earnings after U.S. markets close.

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