After seeing some weakness in the two previous sessions, stocks moved sharply lower over the course of the trading day on Tuesday. Lingering concerns about the global economic outlook contributed to the sell-off amid a lack of major U.S. economic data.
The major averages climbed off their worst levels of the day going into the close but remained firmly in the red. The Dow plunged 203.66 points or 1.6 percent to 12,759.14, the Nasdaq tumbled 40.16 points or 1.4 percent to 2,910.32 and the S&P 500 plummeted 20.97 points or 1.5 percent to 1,343.36.
The broad based sell-off on Wall Street came as traders continued to digest yesterday's remarks from China indicating that it now expects slower than previously estimated economic growth in 2012.
Uncertainty about the outcome of the Greek debt swap with private sector investors also helped to pull stocks further off last week's multi-year highs.
The exchange offer is set to expire on Thursday, with private sector investors required to take a 53.5 percent haircut and receive new bonds guaranteed by the European Financial Stability Facility.
In related news, the International Institute of Finance reportedly warned that the cost of a disorderly Greek default could rise to 1 trillion euros.
As mentioned above, the weakness on Wall Street also came amid a lack of major U.S. economic data. In recent months, largely upbeat U.S. data has helped to overshadow some of the concerns about developments overseas.
Among individual stocks, Nutrisystem (NTRI) came under pressure after the weight-loss company reported a wider than expected fourth quarter loss and forecast 2012 earnings well below analyst estimates. Shares of Nutrisystem fell by 10.9 percent on the day.
Casey's General Stores (CASY) is also moved lower after reporting third quarter earnings and revenues that rose year-over-year but came in below analyst estimates.
On the other hand, shares of Monster Worldwide (MWW) closed up by 10.6 percent after the online job search company said it has hired financial advisors in connection with its review of strategic alternatives.
In overseas trading, stock markets across the Asia-Pacific region saw continued weakness on Tuesday amid concerns about growth in China. Japan's Nikkei 225 Index ended the day down by 0.6 percent, while Hong Kong's Hang Seng Index tumbled by 2.2 percent.
The major European markets also showed substantial moves to the downside on the day. While the U.K.'s FTSE 100 Index fell by 1.9 percent, the German DAX Index and the French CAC 40 Index plummeted by 3.4 percent and 3.6 percent, respectively.
In the bond market, treasuries moved notably higher amid the weakness among stocks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dropped 6.1 basis points to 1.944 percent.
With traders expressing concerns about the outlook for global demand, steel stocks posted particularly steep losses on the day. Reflecting the weakness in the sector, the NYSE Arca Steel Index plunged 4 percent to its worst closing level in almost two months.
Mechel (MTL) helped to lead the steel sector lower, tumbling by 8.1 percent, while Olympic Steel (ZEUS) and Arcelor Mittal (MT) also posted notable losses.
Considerable weakness also emerged among electronic storage stocks, as reflected by the 3.3 percent loss posted by the NYSE Arca Disk Drive Index. Hutchinson Technology (HTCH) and STEC, Inc. (STEC) turned in two of the sector's worst performances.
Networking stocks also showed a significant move to the downside on the day, dragging the NYSE Arca Networking Index down by 3 percent. The loss extended a recent downward move by the index, which fell to a one-month closing low.
Financial, housing, chemical, and oil service stocks also posted steep losses on the day, moving lower along with most of the major sectors amid a broad based sell-off.
Following today's lack of major U.S. economic data, trading on Wednesday could be impacted by the release of reports on private sector employment and labor productivity.
by RTT Staff Writer
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