Stocks Move Mostly Lower, Pulling S&P 500 Further Off Highs - U.S. Commentary

(RTTNews) - After initially showing a lack of direction, stocks moved mostly lower over the course of the trading day on Tuesday. The major averages added to the slim losses posted in the previous session, with the S&P 500 pulling back further off last Friday's record highs.

The major averages climbed off their worst levels going into the close but remained firmly in the red. The Dow fell 67.43 points or 0.4 percent to 16,351.25, the Nasdaq slid 27.26 points or 0.6 percent to 4,307.19 and the S&P 500 dropped 9.54 points or 0.5 percent to 1,867.63.

The weakness on Wall Street came as some traders cashed in on the recent strength in the markets amid a relatively quiet day in terms of corporate and economic news.

Concerns about the outlook for the global economy may also have weighed on the markets following yesterday's disappointing Chinese trade data.

Traders also continue to keep an eye on developments in Ukraine, which is reportedly considering mobilizing 20,000 troops to protect its borders.

Meanwhile, the markets largely shrugged off the release of a report from the Commerce Department showing that wholesale inventories rose by more than expected in the month of January.

The report said wholesale inventories climbed 0.6 percent in January following an upwardly revised 0.4 percent increase in December. Economists had expected inventories to rise by 0.4 percent.

A separate report from the Labor Department showed an uptick in job openings in January, but the data was generally seen as old news.

Among individual stocks, shares of FuelCell Energy (FCEL) showed a substantial downturn over the course of the trading day, with the developer of fuel cell power plants falling by 16.5 percent after rising by as much as 20.6 percent in early trading.

After the close of trading on Monday, FuelCell reported a first quarter loss that narrowed year-over-year on better than expected revenues.

Teen apparel retailer American Eagle Outfitters (AEO) also came under pressure after reporting better than expected fourth quarter results but providing disappointing guidance for the current quarter.

On the other hand, J.C. Penney (JCP) turned in a strong performance after Citigroup upgraded its rating on the department store operator's stock to Buy from Neutral.

Sector News

Networking stocks showed a significant move to the downside over the course of the trading day, dragging the NYSE Arca Networking Index down by 1.6 percent. With the loss, the index pulled back further off the twelve-year closing high it set last Thursday.

Juniper Networks (JNPR) and Adtran (ADTN) turned in two of the networking sector's worst performances, falling by 3.4 percent and 3.2 percent, respectively.

Considerable weakness also emerged among brokerage stocks, as reflected by the 1.4 percent loss posted by the NYSE Arca Broker/Dealer Index. The index pulled back further off last Friday's nearly six-year closing high.

Oil service stocks also came under pressure on the day, moving lower along with the price of crude oil. With crude for April delivery sliding $1.09 to $100.03 a barrel, the Philadelphia Oil Service Index fell by 1.2 percent.

Biotechnology, defense, and banking stocks also saw notable weakness, moving lower along with most of the other major sectors.

Other Markets

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 China's Shanghai Composite Index inched up by 0.1 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose by 0.5 percent, the French CAC 40 Index fell by 0.5 percent and the U.K.'s FTSE 100 Index edged down by 0.1 percent.

In the bond market, treasuries closed modestly higher after initially showing a lack of direction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.8 basis points to 2.766 percent.

Looking Ahead

Amid another quiet day on the U.S. economic front, trading activity on Wednesday may be somewhat subdued as traders look ahead to the release of closely watched reports on retail sales and producer prices later in the week.