IBM, United Tech Drag Dow; Apple Tumbles 6.2 Percent

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, July 21, 2015. Lucas Jackson/Reuters

(Reuters) - U.S. stocks closed lower on Tuesday as results from IBM and United Technologies dampened early optimism over earnings season and after-the-bell declines in major tech shares suggested losses would continue on Wednesday.

The Dow fell 1 percent, with IBM and United Tech contributing around 118 points to the 181-point drop. The decline marked the biggest percentage fall in about two weeks for the blue-chip index.

IBM's shares fell 5.9 percent to $163.07, a day after news that the company's revenues dropped for the 13th consecutive quarter and fell short of analyst expectations.

Fellow Dow component United Technologies tumbled 7 percent to $102.71 and was the worst performer on the Dow after cutting its full-year profit outlook for the third time this year.

"For the first time in a while, fundamentals seem to be driving the action today in an otherwise very quiet macro backdrop and probably will continue to do so for the next couple of weeks as we work through the heart of earnings season," said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management in Chicago.

A trio of tech companies pushed stock futures lower after the closing bell, as Apple tumbled 6.2 percent to $122.65, Microsoft lost 3.5 percent to $45.65, and Yahoo shed 2.2 percent to $38.85 after their quarterly results.

Volume on the Nasdaq e-minis spiked in the minute after the Apple results as 3,935 contracts changed hands, the most active minute of the day including regular trading hours.

Strong earnings from technology companies earlier this earnings season helped drive gains on the Nasdaq, which has outperformed both the Dow and S&P 500 in July.

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 Jan. 1.

So far, 70 percent have reported earnings above analyst expectations, above the 63 percent average beat rate since 1994.

However, only 53 percent have topped revenue forecasts, below the 61 percent average beat rate since 2002. U.S. companies are expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar that reduces the value of U.S. companies' overseas income.

The Dow Jones industrial average fell 181.12 points, or 1 percent, to 17,919.29, the S&P 500 lost 9.07 points, or 0.43 percent, to 2,119.21 and the Nasdaq Composite dropped 10.74 points, or 0.21 percent, to 5,208.12.

NYSE declining issues outnumbered advancing ones 1,841 to 1,217, for a 1.51-to-1 ratio on the downside; on the Nasdaq, 1,630 issues fell and 1,128 advanced for a 1.44-to-1 ratio favoring decliners.

The S&P 500 posted 29 new 52-week highs and 26 new lows; the Nasdaq Composite recorded 94 new highs and 114 new lows.

Volume was light, with about 6.15 billion shares traded on U.S. exchanges, below the 6.54 billion average so far this month, according to BATS Global Markets.