Stocks continue to see substantial weakness in mid-day trading on Tuesday after moving sharply lower earlier in the session. Uncertainty about the political situation in Europe is weighing on the markets following recent elections in Greece and France.
The major averages have climbed well off their worst levels in recent trading but remain firmly in negative territory. The Dow is down 136.50 points or 1.1 percent at 12,872.03, the Nasdaq is down 37.16 points or 1.3 percent at 2,920.60 and the S&P 500 is down 15.41 points or 1.1 percent at 1,354.17.
The weakness on Wall Street is partly due to negative sentiment generated by news that Greece's mainstream conservatives failed to form a coalition government following Sunday's election, giving the Left Coalition party an opportunity to form a government.
While the Left Coalition party is expected to face an uphill battle, its efforts could lead to a government opposed to the terms of the bailout by the European Union and the International Monetary Fund.
Traders also continue to express some concerns about the impact of Socialist Francois Hollande's election as the next president of France.
Hollande is expected to butt heads with German Chancellor Angela Merkel, as he has expressed significant opposition to using austerity measures to address the European debt crisis.
The continued focus on the latest political developments in Europe comes amid another light day on the U.S. economic front.
Among individual stocks, shares of Electronic Arts (EA) have come under pressure after the video game maker reported better than expected fourth quarter results but provided disappointing first quarter guidance. Electronic Arts is currently down by 6.3 percent.
Hospital operator Tenet Healthcare (THC) is also trading lower after reporting a drop by its first quarter earnings on weaker than expected revenues,
Meanwhile, shares of OfficeMax (OMX) have moved sharply higher after the office supplies retailer reported better than expected first quarter earnings. OfficeMax is currently up by 10.7 percent.
Most of the major sectors have come under considerable selling pressure on the day, reflecting broad based weakness in the markets.
Gold stocks are posting particularly steep losses, resulting in a 3.6 percent drop by the NYSE Arca Gold Bugs Index. The weakness in the sector comes as gold for June delivery is tumbling $35.10 to $1,604 an ounce.
Substantial weakness has also emerged among housing stocks, as reflected by the 2.4 percent loss being posted by the Philadelphia Housing Sector Index. PulteGroup (PHM) and Lennar (LEN) are turning in two of the sector's worst performances.
Oil service stocks have also shown a significant move to the downside, moving lower along with the price of crude oil. With crude for June delivery sliding $1.57 to $96.37 a barrel, the Philadelphia Oil Service Index is down by 2.4 percent.
Steel, electronic storage, semiconductor, brokerage, and telecom stocks are also posting notable losses in mid-day trading.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan's Nikkei 225 Index rose by 0.7 percent, while Hong Kong's Hang Seng Index ended the day down by 0.3 percent.
Meanwhile, the major European markets all showed notable moves to the downside on the day. While the French CAC 40 Index plunged 2.8 percent, the German DAX Index and the U.K.'s FTSE 100 Index tumbled by 1.9 percent and 1.8 percent, respectively.
In the bond market, treasuries are extending a recent upward move amid the uncertainty about Europe. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.6 basis points at 1.831 percent.
by RTT Staff Writer
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