Markets dip on gloomy global economy

A Barclays trader works Monday on the floor

A Barclays trader works Monday on the floor of the New York Stock Exchange. The markets ended the day down, and slipped further at the opening Tuesday as investors awaited the start of earnings reports. (Oct. 8, 2012) (Credit: Bloomberg News)

Stocks slumped Tuesday on Wall Street after the International Monetary Fund predicted weaker world economic growth and as investors waited for what they expected to be lower corporate earnings.

The Dow Jones industrial average declined 110.12 points to 13,473.53. The Standard & Poor's 500 index dropped 0.99 percent, to 1,441.48. The Nasdaq composite index fell 1.52 percent to 3,065.02.

The slide came on the five-year anniversary of record high closes for the Dow and S&P 500. The Dow is about 700 points off its all-time high, 14,164.53. It would take a 5 percent rally from here to reach the record.

Investors were discouraged by an International Monetary Fund report released overnight on Monday that said the global economy was weakening and the downturn afflicting developing nations has begun to spread.

The weak forecast came 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 4.1 percent in April.

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