Dow falls 128 points

NEW YORK — Downbeat reports from Alcoa and Chevron at the start of corporate earnings season pulled stock indexes lower for a third straight day Wednesday. The Dow Jones industrial average slumped 128 points, its steepest loss since late June.

Alcoa, the aluminum producer, beat Wall Street’s earnings estimates on Tuesday night but said it expects a slowdown in China to weaken demand for aluminum. Its stock fell 42 cents Wednesday to $8.71.

The company is often used as a weather vane for the global economy. “And judging by Alcoa’s massive inventory of aluminum, it seems pretty anemic,” said Jack Ablin, chief investment officer at Harris Private Bank.

Chevron, the country’s second-largest oil company, warned late Tuesday that slumping oil prices and production would cause earnings to be “substantially lower.” It blamed Hurricane Isaac for disrupting production at a Mississippi refinery.

On Tuesday, the Supreme Court also refused to block a $19 billion judgment levied against Chevron by an Ecuadorian court for polluting the Amazon. Chevron’s stock sank $4.91 to $112.45.

Alcoa and Chevron’s results were an unpromising start to the third-quarter earnings parade, said JJ Kinahan, chief derivatives strategist at Ameritrade. “It’s beginning to look like we might have a lot of gloom-and-doom earnings calls this quarter,” he said.

Of the 10 industry groups within the S&P 500, all but financials fell. Energy and materials stocks, whose fortunes hinge on economic growth, slumped the most.

Bank stocks ended the day flat.

For the week, the Dow and S&P 500 have each lost 1.9 percent, and the Nasdaq has lost 2.7 percent.

In other news:

WAL-MART: It surged $1.28 to $75.42, and earlier touched an all-time high of $76.81.

The president of its U.S. division told Wall Street analysts that the retail giant plans to open more small-scale stores, including its Express chain, to compete with discount retailers and drugstore chains.

YUM BRANDS: It jumped 8 percent, the top stock in the S&P 500 index.

The parent of Taco Bell, Pizza Hut and other fast-food chains said results from China stores should remain strong, even as the Chinese economy slows. Yum gained $5.28 to $70.99.

COSTCO: It posted stronger sales and earnings than forecast as more people signed up to buy the company’s diapers and groceries in bulk. Costco’s stock gained $1.92 to $101.56.

BAE-EADS: British defense contractor BAE and its European counterpart EADS abandoned a proposed merger that would have created a global defense and aerospace giant, citing conflicting interests between the British, French and German governments.