Stocks Remain Firmly Negative In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving notably lower early in the session, stocks continue to see considerable weakness in mid-day trading on Tuesday. The pullback on the day comes on the heels of the substantial rebound seen in the previous week.

Currently, the major averages remain firmly in negative territory. The Dow is down 118.13 points or 0.7 percent at 17,831.24, the Nasdaq is down 52.97 points or 1.1 percent at 4,809.59 and the S&P 500 is down 17.34 points or 0.8 percent at 2,085.61.

The weakness on Wall Street comes as traders are cashing on the strong gains posted last week, which nearly offset the sell-off seen in reaction to Britain's vote to leave the European Union.

After falling sharply last Monday, the major averages moved higher for four straight sessions. For the week, the Dow surged up by 3.1 percent, the S&P 500 jumped by 3.2 percent and the Nasdaq soared by 3.3 percent.

Overall trading activity is somewhat subdued, however, as some traders remain away from their desks following the Fourth of July holiday on Monday.

Traders may also be reluctant to make any significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

The report is expected to show an increase of about 180,000 jobs in the month of June after employment edged up by just 38,000 jobs in May.

Reports on trade and service sector activity may also attract attention this week along with the minutes of the latest Federal Reserve meeting.

The Commerce Department released a report this morning showing that new orders for U.S. manufactured goods pulled back in line with economist estimates in May.

The report said factory orders fell by 1.0 percent in May following a 1.8 percent jump in April. The drop in orders matched economist estimates.

Sector News

Energy stocks have shown a significant move to the downside on the day, moving lower along with the price of crude oil. Crude for August delivery is tumbling $2.12 to $46.87 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index has plunged by 5.5 percent, the NYSE Arca Natural Gas Index is down by 4.1 percent and the NYSE Arca Oil & Gas Index is down by 2.4 percent.

Considerable weakness is also visible among steel stocks, as reflected by the 3.1 percent loss being posted by the NYSE Arca Steel Index. The drop by the index comes after it ended the previous session at a two-month closing high.

Financial stocks are also under pressure, with the NYSE Arca Broker/Dealer Index and the Dow Jones Banks Index both slumping by 2.8 percent.

Computer hardware, airline, and semiconductor stocks are also seeing notable weakness, while gold stocks are bucking the downtrend amid an increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.7 percent, while Hong Kong's Hang Seng Index slumped by 1.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index and the German DAX Index tumbled by 1.7 percent and 1.8 percent, respectively.

In the bond market, treasuries have shown a strong move to the upside, adding to recent gains. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 9.4 basis points at 1.362 percent.