IMF Cuts Growth Forecast, Sending Stocks Lower For A Second Day

U.S. stocks fell for a second day yesterday after the International Monetary Fund cut its global growth forecasts and traders worried financial results will lag expectations as the Q3 earnings season began last night. Energy stocks resisted the downward bias for equities yesterday as crude oil prices rose over 3% as Mid East tensions flared. Consumer stocks had the steepest declines, closely followed by shares of technology and healthcare companies.

The International Monetary Fund helped set yesterday's negative tone when it said the global economic slowdown is worsening, cutting its growth forecasts for the second time since April. The IMF forecast 2012 growth of just 3.3%, down from a July estimate of 3.5% and marking the slowest pace of growth since the 2009 recession.

It also predicted only a modest pickup next year to 3.6%, below its July estimate of 3.9%. U.S. growth is seen around 2% both this year and next.

The U.S. third-quarter earnings season began after the bell with results from Alcoa Inc. (AA), traditionally the first stock out of the gate each quarter. 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.

Also reporting last night were Yum! Brands (YUM), with the parent of fast-food chains KFC, Pizza Hut and Taco Bell expected to earn $0.97 a share on $3.66 billion in revenue, according to the average estimate of analysts polled by FactSet. Global same-store sales are expected to rise 3.7%.

Crude rebounded from several days of declines, with oil for November delivery climbing $3.06 to settle at $92.39 a barrel. November natural gas also rose, adding 6 cents to finish at $3.47 per 1 million BTU. December gold fell $10 to $1765.70 per ounce as the dollar strengthened today. December silver fell 2 cents to $33.99 per ounce while Dec copper settled flat at $3.72 a pound.

Here's where the markets stood at end-of-day:

Dow Jones Industrial Average down 110.12 (-0.81%) to 13,473.53

S&P 500 down 14.40 (-0.99%) to 1,441.48

Nasdaq Composite Index down 47.33 (-1.52%) to 3,065.02

GLOBAL SENTIMENT

Hang Seng Index up 0.54%

Shanghai China Composite Index up 1.97%

FTSE 100 Index down 0.79%

UPSIDE MOVERS

(+) BSMD, Reports 391% year-over-year sales increase for its MicroThermX microwave ablation system during September.

(+) PRPH, Matrixx Initiatives increases its offer to $1.60 per share - 20 cents higher than its previous bid.

(+) SPB, Acquires the Hardware and Home Improvement Group from Stanley Black & Decker (SWK) for $1.4 billion in cash.

(+) RSH, Raised to Buy from Underperform at Bank of America/Merrill Lynch, citing valuation.

DOWNSIDE MOVERS

(-) VDSI, Lowers Q3, FY12 revenue outlooks. Sees FY12 revenues in a range of $150 million to $157 million, well under analyst expectations for $172.61 million in revenue.

(-) ORBK, Chip-inspection company says it now expects Q3 revenues to be around $98 million, trailing the Capital IQ consensus estimate of $115.30 million.

(-) PVA, Starting concurrent underwritten public offerings of 12 million shares of common stock and $50 million of depositary shares.

(-) EW, Cuts its Q3 revenue forecast to $448 million, trailing the analyst consensus of $476.5 million on Capital IQ. Forecasts Q4 rebound.