Wall Street dropped on disappointing earnings from companies including Morgan Stanley and eBay as well as the latest economic indicators suggesting a slowdown in the pace of the recovery.
Shares of Morgan Stanley and eBay fell, last down 4.7 per cent and 5.4 per cent respectively, as they posted results that fell short of expectations. So did UnitedHealth Group, sending its shares 3.7 per cent lower.
Google is set to report results after the closing bell.
The latest economic data were not encouraging either. The Philadelphia Federal Reserve Bank's business activity index fell to 1.3 in April from 2.0 in March. The Conference Board's index of leading indicators posted a surprise drop, declining 0.1 per cent in March. Initial claims for state unemployment benefits climbed 4,000 to a seasonally adjusted 352,000, the Labor Department said.
"The evidence is mounting that the economy lost momentum in March and that has carried to April," Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania, told Reuters.