Market Commentary and Intraday News
Stocks Accelerating To The Downside In Mid-Day Trading - U.S. Commentary
297 days ago
(RTTNews) - With worries about the financial situation in Europe once again generating considerable selling pressure, stocks have moved notably lower over the course of the trading day on Tuesday, adding to the steep losses posted in the previous session.
The major averages have seen some further downside in recent trading, hitting new lows for the session. The Dow is down 134.41 points or 1.1 percent at 12,587.05, the Nasdaq is down 20.55 points or 0.7 percent at 2,869.60 and the S&P 500 is down 13.76 points or 1 percent at 1,336.76.
The continued weakness on Wall Street is partly due to news that credit ratings agency Moody's revised the outlooks on the Aaa sovereign ratings of Germany, the Netherlands and Luxembourg to negative from stable.
Moody's cited the rising uncertainty regarding the outcome of the euro area debt crisis, which stems in part from the increased likelihood of Greece's exit from the euro area.
In other troubling news out of Europe, flash estimates released by Markit Economics showed that its manufacturing index for the eurozone slid 1 point to 44.1 in July. On the other hand, the services index rose 0.5 points to 47.6.
The composite index for both industries remained below 50 for the sixth consecutive month, holding unchanged at 46.4, in line with expectations.
Further selling pressure has recently been generated by a report from Reuters indicating that Greece is unlikely to be able to pay what it owes and further debt restructuring is likely to be necessary.
Citing three European Union officials, Reuters said Greece will be found to be way off track by EU and International Monetary Fund officials who have been assessing the country.
Helping to limit the downside for the markets, a separate report from Markit Economics showed that its index of Chinese manufacturing activity came in at 49.5 in July, up from 48.2 in June.
While the index remains below the key 50 level, it suggested the slowest contraction in manufacturing activity in five months. The modest improvement came about due to a rebound in output.
Traders are also digesting the latest batch of earnings news, including quarterly results from well known companies such as AT&T (T), DuPont (DD), and UPS (UPS). All three stocks are currently moving lower on the day.
Airline stocks have moved sharply lower over the course of the trading day, dragging the NYSE Arca Airline Index down by 2.9 percent. The loss extends the steep drop shown by the index in recent sessions, with the index falling to its lowest intraday level in well over a month.
United Continental (UAL) has helped to lead the airline sector lower, tumbling by 6.5 percent after revealing it incurred a $206 million charge in the second quarter due to integration and severance costs.
Significant weakness also remains visible among networking stocks, as reflected by the 2.4 percent loss being posted by the NYSE Arca Networking Index. With the loss, the index has fallen to a three-year intraday low.
Networking giant Cisco (CSCO) continues to post a standout loss after announcing plans to cut about 1,300 jobs or about 2 percent of its global workforce. Shares of Cisco are down by 5.7 percent, falling to a nine-month low.
Most of the other major sectors have also moved to the downside on the day, with steel, energy, housing, and defense stocks seeing considerable weakness.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Japan's Nikkei 225 Index edged down by 0.2 percent, China's Shanghai Composite Index crept up by 0.2 percent.
Meanwhile, the major European markets all moved to the downside over the course of the trading day. The French CAC 40 Index fell by 0.9 percent, while the U.K.'s FTSE 100 Index and the German DAX Index dropped by 0.6 percent and 0.5 percent, respectively.
In the bond market, treasuries have turned higher over the course of the session after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 1.419 percent.
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