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Stocks extend losses; Dow drops 2 percent

Stocks extend losses; Dow drops 2 percent

Investors sent stocks lower Tuesday, extending a pause in a big four-week rally as the market girds itself for potentially grim earnings reports.
The Dow Jones industrial average dropped about 150 points while the broader indexes fell more than 1.5 percent.
The selling blanketed a broad swath of sectors, from financials to energy, amid a fairly quiet day of trading during a holiday-shortened week. The markets are closed Friday in observance of Good Friday.
Analysts attributed the pullback to profit-taking after a huge advance in March that gave the Dow Jones industrials their best four-week performance in more than 75 years.
Investors are keenly focused on bank earnings that get under way next week, and several pessimistic forecasts about potential loan losses have jolted the market in recent days.
"The real key is going to be bank earnings," said Joe Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wis. "Really the entire market hinges on that."
Meanwhile, aluminum giant Alcoa Inc., the first Dow component to post quarterly results, is expected to report a first-quarter loss after the market closes on Tuesday, setting the tone for potentially more dismal results to come.
In midday trading, the Dow Jones industrial average dropped 149.81, or 1.9 percent, to 7,826.04. The Standard & Poor's 500 index fell 12.71, or 1.5 percent, to 822.77, while the Nasdaq composite index fell 26.95, or 1.7 percent, to 1,579.76.