Dow, S&P 500 Fall for Fourth Straight Session

AMD, which cited weakness in Europe and China as well as a slowdown in consumer PC demand for the poor guidance, saw its shares fell more than 11%. Another factor was a lower outlook from chip capital equipment maker Applied Materials(AMAT) , which saw its stock drop nearly 3%.

In the broad market, the energy, basic materials, capital goods, conglomerates and technology sectors all posted declines.

For much of the day, the apprehension about earnings was at least partially offset by positive developments in the eurozone, where finance ministers reached an agreement on supporting Spain's troubled banks. But there are still many questions about the deal will work and skepticism about whether it's enough.

"The Euro group has agreed to give Spain €30 billion, because you never know when €30billion might not come in handy," noted Paul Donovan, global economist at UBS. "The route for the cash matters. Does Spain end up with the debt on its balance sheet, or is cash passed straight to the banks (retrospectively - initially the money is a government liability)?"

"The news from Spain is going to get worse," said Adrian Day, president of Adrian Day Asset Management. "The deficit will obviously get wider; the governments have said that they aren't going to meet the targets. It strikes me that the market is probably saying bad news is good and the worse Spain gets the more the ECB European Central Bank is going to have to accommodate. There's going to have to be an accommodative policy here."

"We've had 20 plus summit meetings in Europe," said Brett Bartman, senior vice president at RBC Wealth Management. "When there is good news out of them or when they solve some problem, the market heads higher." All three major U.S. averages rallied at the open Tuesday. "I don't make too much of it... until this is really worked on, this is only a temporary bounce. The bounce will not last any longer until the next set of news out of Europe that says something very different."

The FTSE in London finished up 0.65% and the DAX in Germany closed higher by 0.79%. Hong Kong's Hang Seng Stock index finished down 0.16% and the Nikkei in Japan closed lower by 0.44% after China reported weak trade data that pointed to more signs of a slowdown in the Asian economic powerhouse, whose top trading partner is Europe.