Market slides lower on economic news and earnings reports

U.S. stocks closed lower Tuesday after disappointing outlooks from Caterpillar and Microsoft raised worries about future profit growth at companies.

The Dow Jones industrial average dropped 291 points, or 1.7 percent, to close at 17,387 Tuesday. The blue-chip average dropped as much as 390 points earlier.

The Standard & Poor's 500 index slid 27 points, or 1.3 percent, to 2,029. The Nasdaq composite tumbled 90 points, or 1.9 percent, to 4,681.

Microsoft shares slid 9 percent, the biggest fall among S&P 500 stocks. The company noted in its quarterly results that licensing revenue for Windows fell, and it warned that a strong dollar will dent revenue.

Caterpillar's stock fell 7 percent after the heavy equipment maker was hurt in the fourth quarter by restructuring costs, and issued a weak outlook.

“It’s a confluence of things,” said Dan Greenhaus, chief strategist at the brokerage BTIG in New York. “You have growing nervousness about Greece, Chinese industrial profits sinking, and then came the weak reports from the global behemoths. It’s a recipe for the kind of day we’re having.”

This story was originally published January 27, 2015 at 3:24 PM with the headline "Market slides lower on economic news and earnings reports."