US stocks fell on Tuesday amid fresh concerns over the global economy and the upcoming earnings season.
When the market closed, the Dow Jones Industrial Average dropped 110.12 points, or 0.81 percent, to 13,473.53. The Standard & Poor's 500 Index fell 14.40 points, or 0.99 percent, to 1,441.48. The Nasdaq Composite Index tumbled 47.33 points, or 1.52 percent, to 3,065.02.
On day after the World Bank cut its growth forecast for East Asia and Pacific region to the lowest level since 2001, the International Monetary Fund (IMF) also painted a gloomy picture for the world economy, exerting downward pressures to stocks.
The IMF on Tuesday downgraded the growth forecasts for the global economy to 3.3 percent for 2012 and 3.6 percent for 2013 from the July projections of 3.5 percent and 3.9 percent respectively.
According to the IMF, the world economic recovery has suffered new setbacks, and uncertainty weighed heavily on the outlook. It called for US and European policymakers to speed up efforts to tackle challenges.
Concerns over Europe also resurfaced on Tuesday after European Central Bank President Mario Draghi told a European Parliament committee that Greece has made progress on reforming its economy, but has more work to do.
Meanwhile, investors were paying closely attention to the meeting of eurozone financial ministers and German Chancellor Angela Merkel's visit to Greece, her first to the troubled country since the European debt crisis erupted three years ago.
Throughout Tuesday's session, investors were cautious ahead of the new earnings season, which officially kicked off with the Dow component Alcoa after Tuesday's closing bell.
With profit warnings from bellwethers from FedEx to Hewlett- Packard, many analysts warned the coming season may be the weakest since the financial crisis.
Alcoa surprised investors with quarterly earnings and revenue topping Wall Street estimates. However, the company lowered its 2012 outlook for aluminum demand due to a China slowdown that slightly impacts the second-half outlook.
In other markets, the US dollar and the Japanese yen gained strength as refreshed concerns over European debt crisis and the world economic downturn drove investors to safe-haven assets.
Crude prices hiked on Tuesday as the Turkey-Syria tension escalated, threatening oil production in the Middle East.
Light, sweet crude for November delivery rose 3.06 dollars, or 3.43 percent, to settle at 92.39 dollars a barrel on the New York Mercantile Exchange.