Disappointing Data, Earnings Continue To Weigh On Wall Street - U.S. Commentary

(RTTNews) - Stocks continue to see significant weakness in mid-day trading on Tuesday after moving sharply lower at the open. The losses on the day have more than offset yesterday's modest gains, with the Nasdaq poised to end its six-day winning streak.

The major averages have moved roughly sideways in recent trading, stuck firmly in negative territory. The Dow is down 358.22 points or 2 percent at 17,320.48, the Nasdaq is down 87.54 points or 1.8 percent at 4,684.23 and the S&P 500 is down 29.71 points or 1.4 percent at 2,027.38.

A negative reaction to earnings news from several big-name companies has contributed to the day's sell-off on Wall Street.

Shares of Microsoft (MSFT) have shown a particularly steep drop after the software giant reported second quarter earnings that matched analyst estimates but provided disappointing guidance. Microsoft is currently down by 9.3 percent.

Caterpillar (CAT), DuPont (DD), and Procter & Gamble (PG) have also come under pressure after reporting their quarterly results.

Negative sentiment was also generated by a report from the Commerce Department showing a substantial decrease in durable goods orders in the month of December.

The report said durable goods orders tumbled by 3.4 percent in December following a revised 2.1 percent decrease in November.

Economists had expected durable goods orders to increase by 0.5 percent compared to the 0.7 percent drop originally reported for the previous month.

Excluding a sharp drop in orders for transportation equipment, durable goods orders fell by a more modest 0.8 percent in December compared to a 1.3 percent decrease in November.

Meanwhile, traders largely seem to have shrugged off a pair of upbeat reports on new home sales and consumer confidence.

A report from the Commerce Department showed that new home sales jumped to their highest annual rate in over six years in December, while the Conference Board said its consumer confidence index surged up to a seven-year high in January.

Sector News

With Microsoft leading the way lower, software stocks are seeing substantial weakness on the day. The Dow Jones Software Index has plunged by 5.2 percent to its lowest intraday level in three months.

Along with Microsoft, Symantec (SYMC) and CA Technologies (CA) are also posting notable losses in mid-day trading.

Computer hardware stocks have also come under pressure on the day, extending the downward move seen in the previous session. Reflecting the weakness in the sector, the NYSE Arca Computer Hardware Index has fallen by 2.6 percent.

Semiconductor, telecom, internet, and trucking stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.

Meanwhile, gold stocks are among the few groups bucking the downtrend, with the NYSE Arca Gold Bugs Index jumping by 2.8 percent. The strength in the sector comes as gold for February delivery is climbing $15.10 to $1,294.50 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Tuesday. Japan's Nikkei 225 Index surged up by 1.7 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index dropped by 0.6 percent, the French CAC 40 Index slumped by 1.1 percent and the German DAX Index tumbled by 1.6 percent.

In the bond market, treasuries have shown a strong move to the upside amid the sell-off on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6 basis points at 1.768 percent.