While markets are near record highs, June-quarter earnings of S&P 500 companies are expected to dip 1.9 percent, according to Thomson Reuters data. That marks an improvement from the expected decline of 3 percent on July 1, but well below the 5.9 percent gain forecast on January 1.
Dow Jones fell over 1 percent, with IBM and United Tech contributing around 126 points to the drop. The decline put the blue-chip index on track for its biggest percentage decline in about two weeks.
The Dow Jones industrial average fell 204.51 points, or 1.13 percent, to 17,895.9, the S&P 500 lost 9.58 points, or 0.45 percent, to 2,118.7 and the Nasdaq Composite dropped 9.25 points, or 0.18 percent, to 5,209.61.
U.S. stocks fell on Tuesday in the wake of results from IBM and UT which curbed some optimism over earnings season. IBM's shares were down 6.2 percent to $162.42, a day after the company's revenue dropped for the 13th consecutive quarter and fell short of analyst's expectations.
Investors awaited quarterly profits from tech giants including Apple and Microsoft. Which are scheduled to report results after the market close.
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