US stocks retreated on Tuesday as investors grew nervous ahead of first-quarter earnings season.

The Dow Jones Industrial Average lost 186.29 points or 2.34% to finish at 7,789.56. The S&P 500 declined 19.93 points or 2.39% to end at 815.55. The Nasdaq Composite slumped 45.10 points or 2.81% to 1,561.61.

Shares of embattled automaker General Motors Corp. (NYSE: GM) plunged 27 cents or 11.89% to $2 on reports that the company is preparing for bankruptcy.

Equipment maker Caterpillar Inc. (NYSE: CAT) tumbled $1.86 or 5.94% to $29.45.

Energy stocks retreated as crude oil plummeted. Exxon Mobil (NYSE: XOM) slid $1.34 or 1.91% to $68.71. Chevron Corp. (NYSE: CVX) subtracted $1.49 or 2.13% to finish at 68.40.

Technology stocks fell with the broader market on Tuesday. International Business Machines (NYSE: IBM) lost $2.81 or 2.77% to $98.75. Intel Corp. (NASDAQ: INTC) declined 41 cents or 2.59% to $15.45.
    
Among financials, JP Morgan (NYSE: JPM) gave up 95 cents or 3.37% to $27.25. Bank of America (NYSE: BAC) fell 12 cents or 1.58% to $7.48. Wells Fargo (NYSE: WFC) plummeted 40 cents or 2.62% to $14.85. Fresh forecasts from IMF suggest that toxic debts racked up by banks and insurers could spiral to $4 trillion (£2.7 trillion).

Shares of Lincoln National Corp. (NYSE: LNC) jumped 52 cents or 8.16% to $6.89 after the Philadelphia-based life insurer announced that it is paying off $700 million of debt as part of a plan that will leave it with sufficient cash for the "foreseeable future."

Alcoa Inc. (NYSE: AA) finished at $7.79, down 12 cents or 1.52% . After the closing bell on Tuesday, the largest US aluminum maker announced that it swung to a first-quarter loss of $497 million, or 61 cents a share, compared to a profit of $303 million, or 37 cents a share, in the prior year period.

Shares of semiconductor equipment maker Applied Materials Inc. (NASDAQ: AMAT) tumbled $1.01 or 8.74% to $10.55 after it said that a major client cut its order by more than 85% to $250 million from $1.9 billion. Revenue climbed 12 percent, to $75.3 million from $67 million.

Late on Monday, blood-testing products maker Immucor Inc (NASDAQ: BLUD) reported that fiscal third quarter net income rose 1 percent to $19.5 million, or 27 cents a share, $19.3 million a year ago or 27 cents a share, in the prior year quarter. Shares of the company lost $1.28 or 5.32% to close at $22.78.

On the front of economic data, US Federal Reserve said on Tuesday that consumer credit fell by $7.48 billion, or 3.5 percent at an annual rate, to $2.56 trillion in February.

European stocks settled down. The U.K. FTSE dropped 63.02 points or 1.58% to 3,930.52. The German DAX and French CAC slumped 0.63% and 0.94% respectively.

Asian stocks finished with losses. The Nikkei 225 fell 25.08 points or 0.28% to 8,832.85. The Hang Seng index of Hong Kong slipped 69.07 points or 0.46% to 14,928.97.

NYMEX crude oil for May delivery declined $1.90 or 3.7% to settle at $49.15 a barrel.

Disclosure: Author does not own any of the stocks discussed here.