NEW YORK (AP) — Stocks hit their all-time highs exactly five years ago. And corporate earnings reports that begin Tuesday will help determine whether they can make it all the way back to the peak.
Indexes fell on Wall Street as investors reacted to another weak forecast on the global economy and ahead of the traditional start of earnings season: results from Alcoa, the aluminum maker and economic bellwether, which come out after the closing bell.
The Dow Jones industrial average was off 58 points at 13,525 as of 11 a.m. Eastern.
The Standard & Poor's 500 index lost ten points to 1,446 and the Nasdaq gave up 42 points to 3,070.
Five years ago Tuesday, the Dow and S&P 500 hit record highs: The Dow closed at 14,164 and the S&P 500 closed at 1,565. The Dow is currently 4 percent below that peak, the S&P is 7 percent below its record.
Investors were discouraged by an International Monetary Fund report released overnight which said the global economy is weakening and that the downturn afflicting developing nations has begun to spread. The weak forecast comes one day after the World Bank cut its estimate for growth in China, the world's second-largest economy, and for developing countries across Asia.
The IMF forecasts that the world economy will expand 3.3 percent this year, down from the estimate of 3.5 percent growth it issued in July. Its forecast for growth in 2013 is 3.6 percent, down from 3.9 percent three months ago and 4.1 percent in April.
Markets have been supported for months by expectations that the U.S. Federal Reserve would step in if was any sign that the U.S. economic recovery was flaming out. However, economists have continually lowered expectations for the year ahead, and the IMF report only heightened that pessimism.
After the closing bell, aluminum maker Alcoa becomes the first major U.S. company to report third-quarter results. Analysts are expecting earnings at S&P 500 companies to decline overall for the first time in nearly three years.
Wall Street expects Alcoa to break even, but had been predicting profits of 12 cents per share from the aluminum maker as recently as July. Alcoa was up 2 cents at $9.14 in morning trading.
Two big banks, JPMorgan Chase and Wells Fargo, post earnings Friday.
Earlier Tuesday, the National Federation of Independent Business reported that business owners became increasingly pessimistic during September due to the weak hiring environment and poor sales. Nonetheless, the number of owners who expect business conditions to improve in six months gained 4 percentage points. Those believing it's a good time to expand rose 3 percentage points.
Among other stocks making big moves, Edwards Lifesciences dropped $19.51 to $87.90 after the company reported revenue that fell well short of analyst's forecasts. Sales of its Sapien heart valves were weaker than the company had expected.
Yum Brands, which owns the Taco Bell, Pizza Hut and KFC chains, fell 72 cents to $66.22. The company, which also reports results after the closing bell, has predicted a return to rapid growth in its China operations in the second half of the year.
The yield on the 10-year Treasury note fell to 1.72 percent from 1.74 percent late Friday. U.S. government bond trading was closed Monday for the Columbus Day holiday.
European markets were mostly lower. Benchmark indexes fell 0.6 percent in Germany and 0.4 percent Britain. France's stock market index fell 0.2 percent.