While selling pressure remained relatively subdued, stocks moved moderately lower over the course of the trading day on Tuesday. Uncertainty ahead of monetary policy decisions from both sides of the Atlantic contributed to the weakness on Wall Street.
After showing a lack of direction for much of the session, the major averages all ended the day in the red. The Dow fell 64.33 points or 0.5 percent to 13,008.68, the Nasdaq slipped 6.32 points or 0.2 percent to 2,939.52 and the S&P 500 dropped 5.98 points or 0.4 percent to 1,379.32.
The weakness that emerged on Wall Street came as traders looked ahead to monetary policy announcements from the Federal Reserve and the European Central Bank on Wednesday and Thursday, respectively.
Stocks turned in a lackluster performance for most of the day, as traders seemed reluctant to make any significant moves ahead of the announcements. However, modest selling pressure emerged going into the close of trading.
Ahead of the monetary policy announcements as well as Friday's monthly U.S. jobs report, traders shrugged off a batch of largely upbeat economic data.
Standard & Poor's released a report before the start of trading showing a bigger than expected increase in home prices, while a report from the Institute for Supply Management - Chicago showed that Chicago-area business activity unexpectedly expanded at a faster rate in July.
The Conference Board also released a report showing an unexpected improvement in consumer confidence in the month of July, with consumers becoming more optimistic about the short-term outlook.
Meanwhile, a separate report from the Commerce Department showed that consumer spending unexpectedly come in roughly flat in June despite a bigger than expected increase in personal income
On the earnings front, drug giant Pfizer (PFE: Quote) reported second quarter earnings that rose year-over-year and came in above analyst estimates. The company also reported revenues that exceeded expectations.
Aetna (AET: Quote) also reported better than expected second quarter earnings and raised its full-year guidance. Nonetheless, shares of Aetna fell by 2.9 percent despite the upbeat news.
Shares of Humana (HUM: Quote) showed a more significant move to the downside, tumbling by 12.7 percent after the health insurer reported second quarter earnings that fell by more than expected and lowered its full-year guidance.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index surged up by 1.1 percent.
Meanwhile, the major European markets moved to the downside over the course of the session. While the German DAX Index closed just below the unchanged line, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.9 percent and 1 percent, respectively.
In the bond market, treasuries moved modestly higher, continuing to recover from the sell-off seen last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 1.492 percent.
Housing stocks showed a notable move to the downside over the course of the trading day, dragging the Philadelphia Housing Sector Index down by 2.2 percent. With the loss, the index ended the session at its worst closing level in a month.
Standard Pacific (SPF: Quote) and Masco (MAS: Quote) turned in two of the housing sector's worst performances, falling by 9.3 percent and 8.3 percent, respectively.
Considerable weakness also emerged among oil service stocks, which moved lower along with the price of crude oil. With crude for September delivery tumbling $1.72 to $88.06 a barrel, the Philadelphia Oil Service Index fell by 2.2 percent.
Biotechnology, gold, brokerage, and natural gas stocks also showed notable moves to the downside over the course of the trading day.
On the other hand, significant strength remained visible among networking stocks, as reflected by the 1.7 percent gain posted by the NYSE Arca Networking Index. Steel, telecom, and semiconductor stocks also held on to strong gains.
All eyes are likely to be on the Federal Reserve on Wednesday, with the central bank due to announce its latest monetary policy decision at about 2:15 pm ET.
The announcement from the Fed is likely to overshadow key U.S. reports on private sector employment, manufacturing activity, and construction spending.
On the earnings front, Allstate (ALL), Electronic Arts (EA), Edison International (EIX), and Genworth Financial (GNW) are among the companies releasing their quarterly results after the close of today's trading.
Additionally, Avon Products (AVP), Comcast (CMCSA), Harley-Davidson (HOG), MasterCard (MA), and Time Warner (TWX) are among the companies due to report their results before the start of trading on Wednesday.
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by RTT Staff Writer
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