CVX Chevron Corporation

By Ellie Ismailidou and Victor Reklaitis, MarketWatch

Alphabet, Michael Kors climb on strong earnings; BP, Exxon Mobil tumble

U.S. stocks tumbled Tuesday morning as big losses in oil and global equity markets weighed on sentiment and appeared to offset earnings-driven jumps by Google parent Alphabet, Mattel and Michael Kors.

The S&P 500 lost 27 points, or 1.4%, lower at 1,912. The Dow Jones Industrial Average tumbled 250 points, or 1.6%, to 16,196. Meanwhile, the Nasdaq Composite began the day down 54 points, or 1.2%, at 4,565.

A 3% drop in oil prices (http://www.marketwatch.com/story/crude-prices-drop-to-nearly-one-week-low-as-supply-worries-build-2016-02-02), which is following a 6% slide Monday, weighed on energy companies' stocks, with the energy sector being the worst performer on the S&P 500, down 2.8% on the day. Energy names were among the worst performers on the Dow industrials as well, with Chevron Corp (CVX) leading the losses, down 3.7%.

The stock market resumed Tuesday its tight correlation with the gyrations in oil prices, analysts said, after briefly breaking it Monday, when stocks pared losses to end flat despite plummeting oil prices (http://www.marketwatch.com/story/us-stock-futures-fall-as-oil-prices-chinese-markets-drop-2016-02-01).

Analysts said the partial recovery Monday was due to bets the Federal Reserve won't raise interest rates aggressively this year, following a surprise Bank of Japan stimulus effort last week.

Read: Fischer says markets may be right on rates (http://www.marketwatch.com/story/feds-fischer-says-markets-might-be-right-after-all-2016-02-01)

But on Tuesday, equities resumed their downward trend mainly due to "the growing realization that last week's rate cut in Japan was likely the end of this stimulus cycle, and that with economies in the U.S., U.K. and potentially Europe standing on their own two feet, stocks are going to need to as well," said Colin Cieszynski, chief market strategist at CMC Markets, in emailed comments.

Economic news: Beyond data on U.S. auto sales for January, there are no top-tier U.S. economic reports due on Tuesday.

Other markets: China's Shanghai Composite finished 2.3% higher (http://www.marketwatch.com/story/china-shares-gain-as-other-asian-markets-slip-2016-02-01) after the country's central bank injected more liquidity into the financial system, but most other Asian markets took a break from a two-day rally. The Stoxx Europe 600 lost ground for a second straight session (http://www.marketwatch.com/story/european-stocks-face-a-second-day-in-the-red-2016-02-02), while the dollar fell (http://www.marketwatch.com/story/dollar-gains-stalled-as-investors-seek-safety-after-steep-drop-in-oil-prices-2016-02-02) and gold futures inched higher. Treasury yields tumbled to a 9-month low.

Individual movers: Shares in Alphabet Inc. (GOOGL) (GOOGL) climbed 4.2% after the Google parent delivered stronger-than-anticipated quarterly earnings (http://www.marketwatch.com/story/alphabet-stock-surges-on-huge-google-earnings-beat-2016-02-01) late Monday.

Check out: Alphabet now looks like it's growing faster than Apple (http://www.marketwatch.com/story/why-alphabet-is-more-valuable-than-apple-2016-02-01)

Michael Kors Holdings Ltd.'s stock (KORS) jumped 17.4% after the accessories maker posted better-than-expected quarterly results (http://www.marketwatch.com/story/michael-korss-stock-soars-after-profit-sales-beat-2016-02-02) before the open. Mattel Inc. (MAT) also gained 11.6% after holiday results beat forecasts and Stifel upgraded the toy company (http://www.marketwatch.com/story/mattel-upgraded-at-stifel-on-better-than-expected-holiday-results-2016-02-02).

U.S.-listed shares in BP PLC (BP.LN) (BP.LN) fell 9.1% after the U.K. oil giant reported a sharp loss in the fourth quarter (http://www.marketwatch.com/story/bp-suffers-52-billion-annual-loss-2016-02-02), hit by heavy impairments and the continuing impact of a steep slide in oil prices.

Exxon Mobil (XOM) shares lost 2.5% after the largest U.S. oil company said its fourth-quarter profit tumbled 58% as oil prices remained depressed, but the decline was smaller than analysts had feared.

Pfizer Inc. (PFE) inched lower by 0.7% after the drug maker reported better-than-expected results for its fourth quarter, but offered soft guidance for 2016 (http://www.marketwatch.com/story/pfizer-beats-estimates-but-guidance-disappoints-2016-02-02).

United Parcel Service Inc. (UPS) gained 1.1% after the company reported better-than-expected earnings as growth in international package delivery drove profitability (http://www.marketwatch.com/story/ups-profit-beats-on-international-growth-2016-02-02).

Dow Chemical Co. (DOW) gained 1.1% after the company blew past fourth-quarter profit and sales estimates (http://www.marketwatch.com/story/dow-chemical-shares-climb-24-premarket-as-company-tops-profit-and-sales-estimates-2016-02-02).

The notable reporters after the bell include Gilead Sciences Inc. (GILD) , Chipotle Mexican Grill Inc. (CMG) and Yahoo Inc. (YHOO)

Read more: Yahoo revenue expected to fall under $1 billion for the first time in 11 years (http://www.marketwatch.com/story/yahoo-revenue-expected-to-fall-under-1-billion-for-first-time-in-11-years-2016-02-01)

(END) Dow Jones Newswires

February 02, 2016 10:28 ET (15:28 GMT)

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