U.S. STOCK MARKETS

Worries from the tech and industrial sectors and an underwhelming earnings report from bellwether Alcoa sent stocks tumbling Tuesday.

The Dow Jones Industrial Average dropped 83.17 points, or 0.7%, to 12653.12, while the Standard & Poor's 500-stock index fell 10.99 points, or 0.8%, to 1341.47.

Both benchmarks lost ground for the fourth session in a row. For the S&P 500, it's the longest losing streak in nearly two months.

The Nasdaq Composite Index's decline was steeper following a pair of dour forecasts from microchip makers. The tech-heavy benchmark lost 29.44 points, or 1%, to 2902.33.

Advanced Micro Devices slumped 11% after the company cut its second-quarter revenue outlook late Monday, citing weaker-than-expected business conditions in China and Europe.

Also weighing on tech stocks was Applied Materials, down 2.7% after the firm lowered its full-year guidance to reflect weaker-than-expected demand in its semiconductor business.

Industrial and materials stocks were the worst-performing sectors on the S&P 500, after truck-engine maker Cummins cut its full-year sales estimate below expectations, noting slowing demand in the U.S., as well as China, India and Brazil.

Cummins's shares declined 9%, while heavy-machinery maker Caterpillar also fell 3.5%. Alcoa sank 4.1% and was the Dow's biggest decliner after the industrial metals producer posted an earnings loss late Monday amid slumping aluminum prices.

Alcoa's report, the first by a blue-chip company, unofficially kicked off earnings season. U.S. stocks initially followed European markets, which ended broadly higher after euro-zone finance ministers agreed to make billions of dollars in aid available for Spain's banking industry.

In economic news, the National Federation of Independent Business's small-business optimism index fell in June to its lowest reading since October, missing expectations. On Wednesday, investors will be watching the release of minutes from last month's meeting of the Federal Reserve's policy-making arm for signs that U.S. central bankers are ready to take additional steps to prop up the flagging U.S. economy.

EUROPEAN STOCKS, BOND MARKETS

European stocks shook off a four-day slump, finishing in positive territory, supported by a surge in technology stocks and an improvement in sentiment regarding Spain.

Spain's IBEX 35 index gained 0.6% to 6726.90 while the benchmark Stoxx 600 index closed 0.8% higher at 255.60, following four consecutive sessions closing in the red.

Spain's 10-year government bond yield eased 0.23 percentage point to 6.78%, according to Tradeweb, an electronic trading platform.

The rally came after European finance ministers late Monday reached a deal to make 30 billion euros ($36.9 billion) in aid available by the end of the month as the first tranche of the bailout of the Spanish banking sector.

The group has also given Spain extra time to hit a target for reducing its budget deficit. However, the euro struggled to hang on to gains against the dollar after Italian Prime Minister Mario Monti said that, while his country wouldn't need a Greek-style bailout, it wouldn't necessarily be opposed to the European Stability Mechanism buying Italian bonds.

He added that it wouldn't be prudent to say Italy would never need help.

Germany's DAX finished up 0.8% at 6438.33 and France's CAC-40 gained 0.6% to end at 3175.41. The U.K.'s FTSE 100 finished 0.7% higher at 5664.07.

The index was helped by news that industrial production increased by 1.0% between May and April, the biggest monthly increase since March 2010. Italy's FTSE Mib index increased 0.4% to 13868.27, off a session high of 14102.87 after Mr. Monti's comments.

Greece's ASE Composite fell 3.3% to 621.69, dragged down by weakness in the banking sector. The governor of Greece's central bank noted that bank deposits were returning at a satisfactory pace, but the inflows came after Greeks withdrew a record EUR8.5 billion in May. National Bank of Greece slid 8.8% and Piraus Bank fell 7.7%.

The technology sector gained from news that Intel agreed to pay as much as $3.1 billion for a stake of up to 15% in the Netherlands' ASML. Intel will also provide ASML with about $1 billion in research-and-development funding.

The Dutch maker of semiconductor equipment surged 8.6%. Shares of oil companies rose as Norway's government decided to stop a strike by workers in the oil industry, averting a lockout. Shares of Norwegian oil group Statoil rose 1.9%.

ASIA-PACIFIC STOCK MARKETS

Asian stocks dropped Tuesday after Chinese trade data reaffirmed weakening domestic demand in the country, with investors taking little encouragement from news of Europe's fresh lifeline to Spain.

Japan's Nikkei Stock Average eased 0.4%, Hong Kong's Hang Seng Index slipped 0.2% and China's Shanghai Composite Index dropped 0.3%.

South Korea's Kospi lost 0.4% and Taiwan's Taiex lost 0.8%. Regional stocks turned south after data showed China's import growth slowed more than expected in June, while the trade surplus widened sharply in June, as exports continued to grow in double-digit percentage terms.

Resource firms posted notable declines in Asia following the drop in imports from key trading partner China. Korea Zinc Co. lost 1.9% in Seoul, while Aluminum Corp. of China Ltd. and Jiangxi Copper Co. each shed 1.5% in Hong Kong. In Shanghai, Jiangxi slipped 0.3% and Zijin Mining Group Co. lost 1.3%.

Refiners outperformed in Shanghai following a report that the National Development and Reform Commission will Wednesday cut gasoline and diesel prices by about 4.4% to 4.6% amid falling crude-oil prices. China Petroleum & Chemical Corp., or Sinopec, rose 0.7% and PetroChina Co. gained 1.1% in Shanghai.

In Hong Kong, PetroChina climbed 0.1%, but Sinopec declined 1.2%. Concerns that regulations covering the Chinese property market weren't about to be loosened weighed on the sector. On mainland exchanges, Gemdale Corp. fell 1.6% and Poly Real Estate Group Co. tumbled 3.6% in Shanghai, while China Vanke Co. slid 1.2% in Shenzhen.

China Overseas Land & Investment Ltd. slipped 0.2% in Hong Kong. In Tokyo, shares of Mitsubishi UFJ Financial Group Inc. dropped 1% after the Nikkei reported that its core banking unit had suspended two traders suspected of prior involvement in the manipulation of the London interbank offered rate.

COMMODITIES
Base metals closed lower on the London Metal Exchange Tuesday following a lackluster session that saw investors keep to the sidelines amid nervousness over the health of the global economy.

At the close, LME three-month copper was 0.9% lower at $7,490 a metric ton. Aluminum closed at $1,912/ton, down 0.7% on the day.

Oil futures tumbled 2.4% Tuesday as an oilfield shutdown in Norway was averted and as new economic indicators provided fresh evidence of economic weakness.

Light, sweet crude for August delivery settled at $83.91 a barrel on the New York Mercantile Exchange, down $2.08. Much of the loss came in the last 45 minutes of trading.

Brent crude on the ICE futures exchange settled down 2.3%, or $2.35, at $97.97. Gold and other precious metals eased as a stronger dollar gave traders a bearish outlook on the markets.

The most actively traded gold contract, for August delivery, fell 0.6%, or $9.30, to settle at $1,579.80 a troy ounce on the Comex division of the New York Mercantile Exchange. Compiled from MORRISON SECURITIES PTY. LTD.