Wall Street falls 1 percent on Tuesday; Apple surges after market's closing

On Tuesday U.S. stocks closed more than 1 percent lower as disappointing results from a number of leading companies pointed to weakening conditions, while an unexpected decline in durable goods orders also pressured the positive sentiment.

Nine of the 10 primary S&P 500 sectors closed lower on the day, with tech being the biggest disappointment by far. The group lost 3.3 percent in its biggest one-day drop since November 2011, in the wake of results from industry leader Microsoft.

Industrial shares fell, led by Caterpillar. The two firms were the biggest decliners on the Dow, but fellow components Procter & Gable and DuPont Co also plunged.

Microsoft fell 9.3 percent to $42.66 a day after the main engine of its historic earnings power - selling Windows and Office to big businesses - showed signs of waning.

Heavy machinery marker Caterpillar gave an outlook below expectations, warning the recent plunge in oil prices would hurt its energy equipment business. Shares dropped 7.2 percent to $79.85.

With 24 percent of the S&P 500 having reported, 70.6 percent of companies have topped earnings expectations while 55.5 percent have beaten on revenue, according to Reuters. This can be compared with the long-term average of 63 percent for earnings and 61 percent for revenue.

At the same time, many multinationals disappointed this quarter, with the stronger dollar a common culprit. P&G was one of the companies pressured by a stronger dollar, sending shares down 3.4 percent to $86.49.

After the market closed, Apple Inc grew 5.4 percent to $115 after it posted better-than-expected revenue growth, along with record sales of its iPhone line.

AT&T Inc's revenue rose more than expected in the latest quarter. Yahoo Inc reported its results and unveiled a plan for a tax-free spin-off of its 15 percent stake in China's Alibaba Group Holding Ltd, a first step in a highly-anticipated process to unwind the holding, valued at roughly $40 billion.

Shares of AT&T rose 1.8 percent to $33.40 after the bell, while Yahoo added 7.7 percent to $51.69.

The Dow Jones industrial average fell 291.49 points, or 1.65 percent, to 17,387.21, the S&P 500 (SPX) lost 27.54 points, or 1.34 percent, to 2,029.55 and the Nasdaq Composite dropped 90.27 points, or 1.89 percent, to 4,681.50.

Adding to the day's weakness, a gauge of U.S. business investment plans unexpectedly fell in December, another sign that slowing global growth and falling crude oil prices were having an impact on the economy.

On the plus side, consumer confidence posted its highest reading since August 2007. That helped indexes recover from their lows of the session; the Dow earlier fell as much as 2.2 percent.

About 6.5 billion shares traded on all U.S. platforms, according to BATS exchange data, below the month-to-date average of 7.2 billion.

Descending issues outnumbered advancing ones on the NYSE by 1,726 to 1,337, for a 1.29-to-1 ratio; on the Nasdaq, 1,710 issues fell and 1,029 advanced, for a 1.66-to-1 ratio favoring decliners.

The S&P 500 posted 41 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 57 new highs and 49 new lows.