Markets Decline as Quarterly Revenues Disappoint

The latest earnings reports failed to inspire traders on Tuesday, pushing Wall Street markets down at midday.

Shares in health care, technology and financial sectors were among the laggards with bellwethers in those areas reporting revenues that disappointed investors who have focused on revenue growth and optimistic forecasts in search of signs that the economy is improving. A bleak report that housing construction starts were at their lowest levels since late last year added to the muted trade.

“I think in general we are seeing corporate profits are not as strong as we originally had anticipated and there doesn’t seem to be momentum from the first quarter,” said William Fitzpatrick, equities analyst for Optique Capital Management

At midday, the Dow Jones industrial average was down 81.13 points, or 0.8 percent. The broader Standard & Poor’s 500-stock index declined 0.55 percent and the technology heavy Nasdaq slid 0.84 percent.

In the Treasury market, bond prices rose as investors sought a safe haven during the equities upheaval. The yield on the 10-year note fell to 2.93 percent from 2.95 percent late Monday. Oil prices rose 57 cents, to $77.11 a barrel in New York trading.

“There is still a recovery going on and it’s a muted economic recovery,” Mr. Fitzpatrick said. “And that is what’s probably weighing on stocks. We all knew we have got high unemployment, massive government deficit, but the saving grace was that companies were in great shape.”

But that, he said, has not been as good as investors had hoped.

Technology shares were led lower by the computer services company, I.B.M., and the chip maker, Texas Instruments, which both reported sales after the markets closed on Monday that missed analysts’ forecast. I.B.M. shares fell 3.6 percent, while Texas Instruments declined 4.4 percent.

Shares of the health care company, Johnson & Johnson, dropped 2.5 percent after it reported flat earnings but lowered its outlook because of repeated recalls. Pfizer declined 1.7 percent while Merck shares were down 1.4 percent.

And the latest banking giant to report, Goldman Sachs, followed other banks in reporting a sharp drop in revenue in the quarter. Goldman said its revenue fell 36 percent to $8.84 billion from $13.76 billion in the quarter a year ago.

Last week, Citigroup and the Bank of America reported second-quarter results that cast doubt over the outlook for the economy. Morgan Stanley will report earnings on Wednesday, the last major bank to do so.

Goldman also agreed last week to pay $550 million to settle a claim of securities fraud that was filed in April by the Securities and Exchange Commission. Its share slipped 0.29 percent. Of the other major banks, only Citigroup was trading slightly higher at midday.

The bank results added to the already jumpy financial sector, and added to the general feeling that corporate reports were not shaping up as many had hoped in an otherwise bleak economic picture.

Economic data has also continued to be weak. On Tuesday, the Department of Commerce reported that construction starts on residential buildings declined in June to its lowest level since October as the sector struggles with a tepid recovery and the end of a government tax credit.

Investors have picked apart corporate earnings for guidance as to where the economy is headed. And Phil Orlando, chief equity market strategist at Federated Investors, noted that Alcoa, Intel, the CSX Corporation, JPMorgan Chase and W.W. Grainger last week reported strong second-quarter results with relatively upbeat guidance about the second half of this year.

Intel’s results could even suggest an coming boom for the broader technology industry, Mr. Orlando said.

But, he added: “The tone of the earnings season over the last three or four days wasn’t as strong as last week. Investors seem to be more concerned about currency headwinds and potential topline misses based on this economic soft patch.”

“The market is responding more negatively than we thought,” he said. “Our view is that this should have been priced in. There is a concern that what we are looking at right now is not the bottom.”

Apple shares rose 0.66 percent and Yahoo declined 0.36 percent. Both companies report after the market closes.

In Europe, the FTSE 100 index in London settled 0.17 percent lower, while the DAX in Frankfurt fell 0.69 percent. The CAC 40 in Paris declined 0.53 percent.