Troubling Earnings News Contributes To Sell-Off On Wall Street

(RTTNews) - After showing a lack of direction for two straight sessions, stocks moved sharply lower over the course of the trading day on Tuesday. The major averages all showed significant moves to the downside after ending Monday's trading narrowly mixed.

The major averages finished the day just off their lows of the session. The Dow slumped 344.57 points or 1.0 percent to 33,530.83, the Nasdaq plunged 238.05 points or 2.0 percent to 11,799.16 and the S&P 500 tumbled 65.41 points or 1.6 percent to 4,071.63.

The sell-off on Wall Street partly reflected a negative reaction to quarterly results from First Republic (FRC), with the regional bank plunging by 49.4 percent.

The steep drop by First Republic came after the company reported a loss of more than $100 billion in deposits in the first quarter, renewing concerns about turmoil in the banking sector.

Shares of UPS Inc. (UPS) also moved sharply lower after the delivery giant reported weaker than expected first quarter results and forecast full-year revenue at the lower end of its prior forecast.

Meanwhile, other big-name companies like General Motors (GM), PepsiCo (PEP), McDonald's (MCD) and 3M (MMM) reported better than expected quarterly earnings but turned in a mixed performance.

Traders also continued to look ahead to quarterly results from Google parent Alphabet (GOOGL) and software giant Microsoft (MSFT) after the close of trading.

On the U.S. economic front, the Conference Board released a report showing consumer confidence has deteriorated by much more than anticipated in the month of April.

The Conference Board said its consumer confidence index slumped to 101.3 in April from a revised 104.0 in March. Economists had expected the index to edge down to 104.0 from the 104.2 originally reported for the previous month.

A separate report released by the Commerce Department showed new home sales unexpectedly spiked to their highest level in a year in March.

Sector News

Oil service stocks pulled back sharply after rallying during Monday's session, dragging the Philadelphia Oil Service Index down by 3.8 percent.

The sell-off by oil service stocks came amid a steep drop by the price of crude oil, with crude for June delivery tumbling $1.69 to $77.07 a barrel.

Concerns about global demand also contributed to substantial weakness among steel stocks, as reflected by the 3.7 percent nosedive by the NYSE Arca Steel Index.

Transportation stocks also saw considerable weakness following the disappointing results from UPS, resulting in a 3.6 percent slump by the Dow Jones Transportation Average.

Banking, semiconductor and software stocks also moved sharply lower over the course of the session amid broad based weakness.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. While Japan's Nikkei 225 Index bucked the downtrend and crept up by 0.1 percent, China's Shanghai Composite Index fell by 0.3 percent and Hong Kong's Hang Seng Index tumbled by 1.7 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index inched up by 0.1 percent, the U.K.'s FTSE 100 Index dipped by 0.3 percent and the French CAC 40 Index slid by 0.6 percent.

In the bond market, treasuries moved sharply higher, extending the advance seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled 11.9 basis points to 3.396 percent.

Looking Ahead

Trading on Wednesday may be impacted by reaction to the latest earnings news as well as the Commerce Department's report on durable goods orders in the month of March.