The Dow Jones industrial average dropped 291 points, or 1.7 per cent, to close at 17,387 Tuesday. The blue-chip average dropped as much as 390 points earlier. The Standard & Poor's 500 index slid 27 points, or 1.3 per cent, to 2,029. The Nasdaq composite tumbled 90 points, or 1.9 per cent, to 4,681.
Microsoft shares slid 9 per cent, the biggest fall among S&P 500 stocks. The company noted in its quarterly results that licensing revenue for Windows fell, and it warned that a strong dollar will dent revenue.
Caterpillar's stock fell 7 per cent after the heavy equipment maker was hurt in the fourth quarter by restructuring costs, and issued a weak outlook.