Dow 7-day win streak snaps as earnings kick into gear

The Dow's winning streak was snapped at seven days as stocks sank Tuesday on fresh data showing China's economy is slowing and investor angst amid the third-quarter earnings season.

Blue chips comprising the Dow Jones industrial average nosed into positive territory around midday but started and ended the day in the red. The Dow, which lost 0.3%, or 50 points, was looking to notch its longest winning streak since a 10-day uptrend back in March 2013.

The S&P 500 lost 0.7% and the Nasdaq composite slipped 0.9%.

Despite drugmaker Johnson & Johnson (JNJ), one of the 30 stocks in the Dow Jones industrial average, topping earnings per share forecasts before the opening bell on Wall Street, the blue chips and stocks sagged. The culprit for the market malaise appears to be weak economic data out of China, which saw its exports dip 3.7% in September.

J&J shares ended down 0.6% after its earnings release, as revenue came in a tad light.

Profit reports key to market’s next move

The latest news out of China reaffirms fears of a slowdown in the world's second-largest economy and again has investors wondering whether the slowdown in Asia will dent business activity in the United States and Europe as well.

"The concern of the market is how much of the global economic malaise will impact earnings," Patrick Adams, a money manager at Choice Investment Management told clients in a note.

Still, Wall Street is mainly focused this week on the third-quarter earnings season. After today's closing bell, two more Dow components -- banking giant JP Morgan Chase (JPM) and chip maker Intel (INTC) -- are set to report.

Wall Street is bracing for what could be the first negative quarter for corporate profits since the financial crisis back in 2009. Heading into today's trading session, profit for the S&P 500 was forecast to contract 4.8%.

Investors are split on how the earnings season will impact the stock market, which has rallied more than 7% from its lows back in late August.

Bulls argue that the earnings bar has been set so low that U.S. companies will be able top lowered forecasts, giving the stock market a lift.

Skeptics argue that weak corporate profits could hurt stocks.

"Earnings may be a roadblock," warns Russ Koesterich, global chief investment strategist at BlackRock. "Absent an unexpected improvement in earnings, or at least more positive guidance for the fourth quarter, the rally in U.S. equities is likely to be contained."

U.S. stocks Tuesday followed global stocks lower. In Asia, Japan's Nikkei 225 fell 1.1%. In Hong Kong, the Hang Seng dipped 0.6%, while shares in  mainland China's Shanghai composite index eked out a 0.2% gain.

Shares in Europe were trading lower. Germany's DAX was down 1.3% and the CAC 40 was off 1.4% in Paris.