Richard Drew, Associated Press
A pair of specialists confer on the trading floor of the New York Stock Exchange, Wednesday, May 30, 2012, in New York.

NEW YORK — Stocks fell sharply on Thursday as investors reacted to disappointing corporate earnings and outlooks from major U.S. companies including Exxon Mobil and Whole Foods Markets. The slide put major indexes into the red for July, leaving the market on track for its first monthly loss since January. Argentina's stock market plunged after the South American nation defaulted on its debt for the second time in 13 years.

KEEPING SCORE: The Standard & Poor's 500 index dropped 30 points, or 1.6 percent, to 1,939 as of 12:32 p.m. Eastern time. The Dow Jones industrial average fell 218 points, or 1.3 percent, to 16,662. The Nasdaq composite dropped 84 points, or 1.9 percent, to 4,378. The Russell 2000, a gauge of small-company stocks, dropped 25 points, or 2.2 percent, to 1,121.

OIL PRODUCTION WOES: Exxon Mobil fell $2.34, or 2.3 percent, to $100.90 after the energy company said that oil and gas production slipped 6 percent, disappointing analysts. Oil and gas production fell to 3.84 million barrels of oil and gas per day from 4.15 million barrels last year. The decline was driven by the expiration of rights to a field in Abu Dhabi and natural field declines.

BAD BOOKS: L-3 Communications plunged $19.46, or 16.3 percent, to $100.19 after the company reported that it was investigating accounting irregularities at is Aerospace Systems unit. The company said it expects to incur a charge of $84 million and cut its earnings forecast for the second half of the year.

BAD MEAT: Yum Brands slumped $3.89, or 5.3 percent, to $69.09 after he owner of the KFC and Pizza Hut fast-food chains said Thursday a food safety scandal in China that involved repacked meat has hurt sales and might be severe enough to cut into the company's global profit. Yum said in a regulatory filing that it was too early to know when sales might rebound.

ORGANIC MAINSTREAM: Whole Foods Market fell $1.26, or 3.2 percent, to $37.85 after reporting quarterly sales that fell shy of Wall Street expectations. The upscale grocer also lowered its sales forecast for the year. That raised worries about the intensifying competition Whole Foods is facing. The company, based in Austin, Texas, has enjoyed growth as more Americans move to eat diets they feel are wholesome. More recently, however, it products have become more mainstream.

ARGENTINE STOCKS: Argentina's stock market slumped 588 points, or 6.6 percent, to 8,348. The collapse of talks with U.S. creditors Wednesday sent Argentina into its second debt default in 13 years and raised questions about what comes next for the South American nation's staggering economy.

OIL OFF THE BOIL: Benchmark U.S. crude for September delivery dropped by $1.69, or 1.7 percent, to $98.51 a barrel. After running up to $107 in June, it has steadily fallen back as fears of supply disruptions from Russia and the Middle East ebbed.

BONDS, CURRENCIES: Prices for U.S. government bonds edged higher. The yield on the 10-year Treasury note, which falls as prices rise, dropped to 2.55 percent from 2.56 percent Wednesday. The euro weakened to $1.3389. The dollar fell against the yen to 102.77 yen.

Johnson reported from Mumbai, India.