Stocks have shown a notable move to the downside in early trading on Tuesday, giving back some ground after moving sharply higher in recent sessions. The major averages have all slid firmly into negative territory, with the Nasdaq and the S&P 500 pulling back off Monday's multi-year closing highs.
The major averages have edged up off their lows for the session in the past few minutes but continue to post steep losses. The Dow is down 98.20 points or 0.7 percent at 13,140.93, the Nasdaq is down 25.06 points or 0.8 percent to 3,053.26 and the S&P 500 is down 9.53 points or 0.7 percent at 1,400.22.
Concerns about the outlook for the global economy have contributed to the early weakness on Wall Street, with an executive at mining giant BHP Billiton (BHP) warning that Chinese iron ore demand in flattening.
News that China is raising retail gasoline and diesel prices for the second time this year has also raised concerns about the outlook for growth in the world's second largest economy.
Additionally, the Commerce Department released a report showing an unexpected drop in U.S. housing starts in the month of February, although starts came in nearly in line with estimates due to an upward revision to the data for January.
The report showed that housing starts fell 1.1 percent to an annual rate of 698,000 in February from the revised January estimate of 706,000. Economists had expected starts to edge up to 700,000 from the 699,000 that had been reported for the previous month.
On the other hand, the report showed that building permits, an indicator of future housing demand, jumped 5.1 percent to an annual rate of 717,000 in February. With the increase, building permits reached their highest level in over three years.
Further housing data is scheduled to be released later this week, with traders likely to keep an eye on reports on new and existing home sales.
Steel stocks are posting particularly steep losses amid the news out of China, with the NYSE Arca Steel Index tumbling by 3.1 percent. The index is pulling back well off the one-month closing high set in the previous session.
Other resource stocks have also come under pressure amid weakness among commodities prices. Oil service stocks are posting notable losses as the price of crude oil tumbles by nearly $2 a barrel.
Most of the other major sectors have also moved to the downside as traders cash in on the recent strength in the markets. Railroad, networking, and housing stocks are seeing significant weakness.
Among individual stocks, shares of Adobe Systems (ADBE) are down by 2.7 percent in early trading after the design software developer reported first quarter earnings that fell year-over-year and provided disappointing second quarter earnings guidance.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday, although the Japanese markets were closed for a public holiday. Hong Kong's Hang Seng Index fell by 1.1 percent, while Australia's All Ordinaries Index dropped by 0.4 percent.
The major European markets have also moved to the downside, pulling back further off their recent highs. While the U.K.'s FTSE 100 Index is down by 1.2 percent, the French CAC 40 Index and the German DAX Index are both down by 1.4 percent.
In the bond market, treasuries are regaining some ground after falling sharply in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.5 basis points at 2.354 percent after ending the previous session at a four-month closing high.
by RTT Staff Writer
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