NEW YORK — Worries about weakening global growth drove the stock market lower Tuesday.
The U.S. economy may be strengthening, but the outlook elsewhere is far less encouraging. On Tuesday, the International Monetary Fund trimmed its forecast for global growth. A surprisingly weak report on industrial production in Germany, Europe’s biggest economy, added to the concerns.
Industrial companies, whose fortunes are closely tied to those of the global economy, led the sell-off. Government bonds rallied as investors snapped up safe assets, pushing the yield on the benchmark 10-year Treasury note close to its lowest level of the year.
After a weak September, the slump in stocks is showing no signs of abating in October. The Standard &Poor’s index has now dropped almost 4 percent since closing at a record Sept. 18.
“Investors are starting to get worried that Europe is going to dent growth,” said Jack Ablin, chief investment officer at BMO Private Bank.
The Standard &Poor’s 500 index fell 29.72 points, or 1.5 percent, to 1,935.10. The index closed at a record 2,011.36 on Sept. 18.
The Dow Jones industrial average dropped 272.52 points, or 1.6 percent, to 16,719.39. The Nasdaq composite fell 69.60 points, or 1.6 percent, to 4,385.20.
Fear of a slowdown in other parts of the world weighing on corporate profits was behind the sell-off Tuesday. Companies will soon start reporting earnings for the third quarter and investors will be watching for their forecasts for the rest of the year. Aluminum giant Alcoa, typically one of the first companies to report earnings, was to announce its quarterly results after the market closes today.
“Investors have become a bit more cautious about earnings and about the pace of global growth,” said Kate Warne, a principal at Edward Jones, an investment firm. “That reassessment is leading to a bit more caution on stocks.”