By Michael Wursthorn and Justin Yang 

The Dow Jones Industrial Average tumbled to its biggest decline in three months Thursday, the latest pullback to disrupt a rally that has sent U.S. stock indexes to several records this year.

Traders and money managers largely attributed the blue-chip index's 274-point slide to a round of disappointing earnings from companies ranging from big-box retailers to technology behemoths. Thursday's declines eclipsed a selloff a week earlier, when shares fell following a spate of weak corporate results and rising tensions between the U.S. and North Korea.

Some investors said the moves were likely being amplified by light stock-trading volumes over the summer, but they also cautioned that there were signs of increasing unease in the market after a period of calm had pushed measures of market volatility to historic lows last month.

Stocks extended declines Thursday afternoon following a terror attack in Barcelona that left at least 13 people dead and more than 50 others injured.

Earlier, U.S. government bond prices briefly surged as unconfirmed rumors swirled that Gary Cohn, President Donald Trump's National Economic Council director, was resigning in the wake of the Mr. Trump's remarks about the protests in Charlottesville, Va. The yield on the benchmark 10-year U.S. Treasury note settled at 2.197%, compared with 2.224% Wednesday. Bond yields fall as prices rise.

Two White House aides told The Wall Street Journal that Mr. Cohn hadn't resigned and wasn't planning to do so. Mr. Cohn is one of the president's closest advisers and Mr. Trump has said he was considering Mr. Cohn for the chairmanship of the Federal Reserve. Investors and analysts said the response showed traders were closely following events at the White House.

Mr. Trump disbanded two CEO councils Wednesday amid backlash over his response to Charlottesville, adding to some investors' doubts about how effective the administration will be in pushing through policy changes. Investors' hopes for tax cuts and fiscal stimulus had already dimmed, with Mr. Trump's agenda facing hurdles in Congress.

All 30 companies in the Dow Jones Industrial Average fell Thursday, along with all 11 major sectors of the S&P 500.

The Dow industrials declined 274 points, or 1.2%, to 21751 -- its biggest decline since May 17. The S&P 500 shed 1.5% and the Nasdaq Composite fell 1.9%.

Wall Street's "fear gauge," the CBOE Volatility Index, jumped more than 30%.

Retailer Wal-Mart Stores declined 1.6% after the company reported lower profit on higher same-store sales.

Mark Stoeckle, chief executive and senior portfolio manager of Adams Funds, said his firm owns shares of the retailer and believes its sales growth amid the industry's broader struggles makes it attractive.

The pullback "could be a good opportunity for people who don't own Wal-Mart," said Mr. Stoeckle.

His firm also weighed adding to its Cisco Systems position in a meeting Thursday morning, but executives felt it was competing against companies that showed better growth, he said. "Doing OK in an environment where you got too many opportunities isn't good enough," Mr. Stoeckle added.

Shares of Cisco shed 4% after the company said revenue fell last quarter. Victoria's Secret parent L Brands was one of the worst-performing stocks in the S&P 500, falling 3.6% after the company cut its forecast for the remainder of the year.

NetApp fell 6.7% after the company issued sales guidance that fell on the low end of analyst projections, even though it beat quarterly earnings expectations.

When shares fall after companies top projections, that could suggest some pockets of the market have reached a peak, some investors said.

"When good news isn't rewarded, that tends to give you pause," said Michael Scanlon, a portfolio manager at Manulife Asset Management.

As U.S. stocks retreated, investments considered to be relatively safe stores of value rose. Gold for August delivery gained 0.7% to $1,286.40 an ounce.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com

(END) Dow Jones Newswires

August 17, 2017 16:45 ET (20:45 GMT)