Wall Street falls on profit outlook worries

NEW YORK (Reuters) - Stocks fell on Tuesday on worries over earnings and the profit outlook as the slowing economy sapped business and consumer demand.

Tech bellwether Texas Instruments Inc warned of slowing sales for its widely used analog chips, while chemical company DuPont Co cut its full-year forecast.

Texas Instruments slipped 9 percent and DuPont gave up more than 3 percent.

Bucking the trend, diversified manufacturer 3M Co's shares rose on higher-than-expected earnings. In addition, signs of thawing in the seized up credit markets helped stocks to limit losses.

But a number of negative corporate outlooks kept the main indexes in the red.

"The market expectation is already there looking for the fourth quarter to be obviously weaker than the third, so this is every company's opportunity to basically put it all out there and say the fourth quarter's looking weak," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co.

The Dow Jones industrial average fell 46.04 points, or 0.50 percent, to 9,219.39. The Standard & Poor's 500 Index slipped 6.43 points, or 0.65 percent, to 978.97. The Nasdaq Composite Index gave up 14.20 points, or 0.80 percent, at 1,755.83.

A fall in bank-to-bank borrowing costs suggested some confidence was returning on hopes that moves by central banks to ease the credit crunch were taking hold.

The Federal Reserve launched a new facility to fund purchases of certificates of deposit and commercial paper from money market mutual funds in the latest step to provide liquidity to strained financial markets.

The Fed's announcement reinforces the feeling that there is a commitment to mitigate the depth of the slowdown, Pado said.

Shares of energy producers were also hurt as the price of crude oil futures slid more than $2 to around $71.76 a barrel on fears a global recession will weaken demand for oil. The day after the sector helped fuel a rally on Wall Street, the S&P energy index was down 3 percent, while Exxon Mobil fell 3.4 percent to $72.42.

But there were still bright spots among the quarterly results. Drug maker Pfizer Inc beat Wall Street's expectations as the company reined in costs, while 3M Co said profit rose as it diversified its portfolio and saw robust operating margins. Pfizer rose 2.5 percent to $17.78, and 3M gained 4 percent to $59.82.

Texas Instruments fell 9.1 percent to $16.35. and DuPont was down 3.4 percent at $34.96

Citigroup Inc fell after Goldman Sacks reinstated coverage with a "sell" rating. Citigroup was down 4.3 percent at $14.45.

Shares of Apple were among the biggest drags on the Nasdaq ahead of quarterly results expected after the closing bell. Apple was down 2.5 percent at $96.00.

(Editing by Kenneth Barry)