Wall Street falls, led by declines in technology

U.S. stocks declined on Tuesday, led by losses in technology after brokerage downgrades of Intel and other major companies amid worries about third-quarter U.S. earnings.

Earnings reports for S&P 500 companies, which begin later on Tuesday, may show the first quarterly drop in three years, according to analysts' estimates.

Shares of Intel, the world's largest semiconductor maker, fell 2.6 percent at $21.92 after negative reports by at least two brokerages, including Robert W. Baird & Co, which cut its price target for Intel citing weak demand for notebooks.

The PHLX semiconductor index lost 1.7 percent.

Apple shares fell 1.8 percent to $626.80 and were the biggest drag on the Nasdaq, while shares of Netflix dropped 8.8 percent to $67.03 after Bank of America Merrill Lynch cut the stock's rating.

Repeated warnings about the economy have left investors cautious before what could be a disappointing earnings season, after a rally that has pushed the S&P 500 up nearly 16 percent so far in 2012, driving it to an almost five-year high.

"Coming into earnings seasion, everybody is keeping their fingers crossed, being optimistic, but we've seen these economic data points through the quarter, so we kind of know it's going to be a muted season," said Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston.

Analysts forecast third-quarter earnings of S&P 500 companies would fall 2.3 percent from the year-ago quarter, according to Thomson Reuters data.

Earnings season will get under way after the bell when Dow component Alcoa Inc reports quarterly results. Analysts expect Alcoa's third-quarter results to show the aluminum company broke even, down from a profit of 15 cents per share a year earlier, according to Thomson Reuters data.

Adding to the bearish tone, the International Monetary Fund said the global economic slowdown is worsening. It cut its growth forecasts for the second time since April.

The Dow Jones industrial average was down 81.21 points, or 0.60 percent, at 13,502.44. The Standard & Poor's 500 Index was down 11.20 points, or 0.77 percent, at 1,444.68. The Nasdaq Composite Index was down 44.75 points, or 1.44 percent, at 3,067.61.

Shares of Alcoa were up 0.1 percent at $9.13. The company's results are watched for what they reveal about global growth since aluminum plays a key role in many parts of the economy.

Among large multinationals that have warned about earnings, citing weakness in Europe and China, are FedEx Corp, Caterpillar Inc and Hewlett-Packard Co.