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Posted: Thursday, July 31st 2014 at 1:37pm

Stocks down sharply at midday as earnings disappoint; Dow off 200+

By The Associated Press
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NEW YORK (AP) -- Stocks fell sharply on Thursday as investors reacted to disappointing corporate earnings and outlooks from major U.S. companies including Exxon Mobil and Whole Foods Markets. The slide put major indexes into the red for July, leaving the market on track for its first monthly loss since January. Argentina's stock market plunged after the South American nation defaulted on its debt for the second time in 13 years.

KEEPING SCORE: The Standard & Poor's 500 index dropped 27 points, or 1.4 percent, to 1,942 as of 1:16 p.m. Eastern time. The Dow Jones industrial average fell 206 points, or 1.2 percent, to 16,674. The Nasdaq composite dropped 73 points, or 1.6 percent, to 4,390. The Russell 2000, a gauge of small-company stocks, dropped 22 points, or 1.9 percent, to 1,124.

OIL PRODUCTION WOES: Exxon Mobil fell $2.83, or 2.7 percent, to $100.42 after the energy company said that oil and gas production slipped 6 percent, disappointing analysts. Oil and gas production fell to 3.84 million barrels of oil and gas per day from 4.15 million barrels last year. The decline was driven by the expiration of rights to a field in Abu Dhabi and natural field declines.

BAD BOOKS: L-3 Communications plunged $17.58, or 14.7 percent, to $100.37 after the company reported that it was investigating accounting irregularities at is Aerospace Systems unit. The company said it expects to incur a charge of $84 million and cut its earnings forecast for the second half of the year.

BAD MEAT: Yum Brands slumped $3.84, or 5.3 percent, to $69.16 after the owner of the KFC and Pizza Hut fast-food chains said Thursday a food safety scandal in China that involved repacked meat has hurt sales and might be severe enough to cut into the company's global profit. Yum said in a regulatory filing that it was too early to know when sales might rebound.

ARGENTINE STOCKS: Argentina's stock market slumped 558 points, or 6.3 percent, to 8,379. The collapse of talks with U.S. creditors Wednesday sent Argentina into its second debt default in 13 years and raised questions about what comes next for the South American nation's staggering economy.

THE QUOTES: The S&P 500 index closed at a record earlier in the month, extending a five-year bull run. The S&P 500 hasn't had a sell off severe enough to qualify as a correction, Wall Street parlance for a fall of 10 percent or more from a peak, since October 2011.

The gains have also come despite rising political tensions between Russia and the West and an escalating war between Israel and the Palestinian Group Hamas. Argentina's default can now be added to the list of worrying developments.

"It's an accumulation of all these little things," said Jerry Braakman, chief investment officer at First American Trust. "People feel that we due for, not a major correction, but some sell-off in the three to 10 percent range."

ORGANIC ANGST: Whole Foods Market fell $1.26, or 3.2 percent, to $37.85 after reporting quarterly sales that fell shy of Wall Street expectations. The upscale grocer also lowered its sales forecast for the year. That raised worries about the intensifying competition Whole Foods is facing. The company, based in Austin, Texas, has enjoyed growth as more Americans move to eat diets they feel are wholesome. More recently, however, it products have become more mainstream.

BONDS: Prices for U.S. government bonds edged higher. The yield on the 10-year Treasury note, which falls as prices rise, dropped to 2.55 percent from 2.56 percent Wednesday.
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