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* Alcoa's stock falls 4 pct after quarterly net loss
* Yum Brands defies China's sluggish growth, raises outlook
* True Religion exploring sale, shares jump
* Dow off 0.8 pct, S&P 500 off 0.6 pct, Nasdaq down 0.4 pct
By Atossa Araxia Abrahamian
NEW YORK, Oct 10 (Reuters) - U.S. stocks fell on Wednesday, a day after earnings season opened with Dow component Alcoa posting a quarterly net loss while Chevron's profit warning dragged on the energy sector.
Shares of Alcoa slid 4.7 percent to $8.70 and weighed on the Dow following the U.S. aluminum producer's report late Tuesday of a quarterly net loss. Alcoa attributed the loss to a slump in the price of aluminum and weak demand. On Wednesday, a Nomura analyst cut the target price on Alcoa's stock to $9 from $12, citing "continued weakness in aluminum prices" as a key reason for the change.
Chevron Corp shares fell 4.2 percent to $112.39 and ranked as the biggest drag on the S&P 500 after the second-largest U.S. oil company warned that third-quarter profits would be "substantially lower" than in the previous quarter. Chevron said a hurricane and planned maintenance had curtailed its oil and gas output, while a fire hurt its refining business.
An S&P energy sector index fell 1.9 percent.
The S&P 500 index is on track for its fourth day of declines on worries that the global economic slowdown will hurt profits more than expected. S&P 500 companies' third-quarter earnings are expected to fall 2.9 percent from a year ago, which would be the first decline in three years.
"The temptation to sell is out there," said John Brady, managing director of R.J. O'Brien & Associates in Chicago. "Equities have had a tremendous year, and the outlook is very unclear. So why not reduce risk? It's hard to imagine an additional 20 percent rally from here in the next three or four months."
The larger economic backdrop is also casting a shadow. The International Monetary Fund and the World Bank recently cut their global outlooks. And the European debt crisis drags on.
With the latest decline, the S&P 500 broke below the technical support level of 1,440.
"We think we will tuck under 1,400 but I'm not calling for a wholesale sell-off," said Rick Bensignor, senior trading strategist at Wells Fargo Securities in New York. "We're still not far off the highs, and have not yet seen significant distribution panic selling of stock."
The Dow Jones industrial average dropped 103.65 points, or 0.77 percent, to 13,369.88. The Standard & Poor's 500 Index fell 8.45 points, or 0.59 percent, to 1,433.03. The Nasdaq Composite Index slipped 13.43 points, or 0.44 percent, to 3,051.59.
Although the market was down, there were some bright spots.
The stock of Yum Brands Inc climbed 8 percent to $71.01 and ranked as the S&P 500's best performer. Yum, the parent company of KFC, Taco Bell and other fast-food restaurant chains, raised its full-year profit forecast after sales in China held up despite slowing growth in that market.
Shares of Wal-Mart Stores Inc, a Dow component, hit an all-time high of $76.81 on Wednesday morning after CEO Mike Duke said the world's largest retailer was gaining widespread market share. The CEO also said Wal-Mart sees its international business as a growth engine despite its decision to slow down store openings in some key countries. At midday, Wal-Mart's stock was up 3.4 percent at $76.68.
Warehouse chain Costco Wholesale Corp reported a 27 percent jump in quarterly profit on higher sales and membership fees. Costco shares shot up 3.4 percent to $103.06.
True Religion Apparel Inc surged 22 percent to $25.64 after the denim maker said it was evaluating strategic alternatives, which could include a possible sale of the company, after receiving indications of interest from third parties.
On the U.S. economic front, data showed wholesale inventories rose 0.5 percent, as expected, in August.
Investors also await the Federal Reserve's Beige Book at 2 p.m (1800 GMT) for the U.S. central bank's assessment of the economy.
Engine maker Cummins Inc lowered its 2012 forecast for a second time this year and said it would cut up to 1,500 jobs. Cummins shares dropped 3.1 percent to $88.05.
FedEx Corp said it plans to cut costs at its underperforming express air freight and services divisions, with a goal of improving profits at those operations by $1.7 billion over the next four years. FedEx shares gained 4.7 percent to $89.57.
The cautious outlooks are the latest in a string of forecasts from large multinational companies, including Caterpillar Inc and Hewlett-Packard Co.