After moving sharply lower early in the session, stocks remain mostly negative in mid-day trading on Tuesday. While selling pressure has waned from earlier in the day, the markets continue to see considerable weakness following the recent rally.
The major averages are off their worst levels of the day but remain firmly in negative territory. The Dow is down 70.57 points or 0.5 percent at 13,168.56, the Nasdaq is down 21.91 points or 0.7 percent at 3,056.41 and the S&P 500 is down 7.61 points or 0.5 percent at 1,402.14.
Much of the weakness on Wall Street stems from renewed concerns about the outlook for the global economy, 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.
Among individual stocks, shares of Adobe Systems (ADBE) are down by 3.7 percent after the design software developer reported first quarter earnings that fell year-over-year and provided disappointing second quarter earnings guidance.
Steel stocks continue to see substantial weakness amid concerns about Chinese demand, with the NYSE Arca Steel Index down by 2.7 percent. With the loss, the index has pulled back well off the one-month closing high it set on Monday.
Gerdau (GGB) and Cliffs Natural Resources (CLF) are turning in two of the steel sector's worst performances, falling by 3.7 percent and 3.2 percent, respectively.
Considerable weakness also remains visible among oil service stocks, as reflected by the 2.2 percent loss being posted by the Philadelphia Oil Service Index. The weakness in the sector comes as crude oil for April delivery has tumbled $1.91 to $106.18 a barrel.
Health insurance stocks have also come under pressure on the day, dragging the Morgan Stanley Healthcare Payor Index down by 2.1 percent.
Railroad, healthcare provider, and networking stocks are also posting notable losses, moving to the downside along with most of the major sectors.
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 has fallen by 1.1 percent, the French CAC 40 Index and the German DAX Index have both slid by 1.2 percent.
In the bond market, treasuries are seeing modest strength 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 2.2 basis points at 2.357 percent after ending the previous session at a four-month closing high.
by RTT Staff Writer
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