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U.S. stocks tumbled on Tuesday, with Microsoft and Caterpillar shares down sharply after quarterly results, while an unexpected decline in durable goods orders also weighed on sentiment.
Energy shares on the S&P 500 were looking to post their sixth positive day in the last seven, boosted by a more than 2 percent rise in the price of crude futures.
Microsoft fell nearly 9 percent to $42.93 the day after the Dow component reported results. The main engine of its historic earnings power, selling Windows and Office to big businesses, is showing signs of waning.
Shares of construction and mining equipment maker Caterpillar fell 7.4 percent to $79.69 after its net profit came in below market expectations.
Many multinational companies have posted disappointing results and forecasts, with the stronger dollar a common culprit.
Adding to earnings concerns, a gauge of U.S. business investment plans unexpectedly fell in December, a potential sign that slowing global growth and falling crude oil prices were starting to have an impact on the economy.
On the other hand, consumer confidence posted its highest reading since August 2007.
"U.S. equities could come under pressure as investors ratchet down their growth estimates for the U.S. economy," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
"There was just too much hype about the U.S. economy having risen into a new and higher growth channel. We're still stumbling along."
At 12:29 p.m. EST (1729 GMT) the Dow Jones industrial average fell 308.41 points, or 1.74 percent, to 17,370.29, the S&P 500 lost 24.05 points, or 1.17 percent, to 2,033.04 and the Nasdaq Composite dropped 72.29 points, or 1.52 percent, to 4,699.47.
Worries lingered over Greece's new anti-bailout government and its implications for the euro zone. The leftist government that came to power in Athens following elections on Sunday looks set on a collision course with the country's creditors. U.S.-traded shares of the National Bank of Greece fell 12.9 percent to $1.35.
Facebook shares fell 1.9 percent to $76.02 after access to the world's largest social network and its Instagram photo-sharing site was blocked around the world for up to an hour on Tuesday. The company said the reason was an internal fault and not an outside attack.
Procter & Gamble shares fell 3.6 percent to $86.37 after the world's largest household products maker reported a near 31 percent fall in quarterly profit, hurt by a stronger dollar.
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