Stocks Finish Volatile Trading Session Firmly In The Red - U.S. Commentary

(RTTNews) - Stocks saw considerable volatility over the course of the trading day on Tuesday before ending the session firmly in the red. The drop pulled the Dow and the S&P 500 down off the nearly two-month closing highs set on Monday.

The major averages all closed in the red, although the Dow showed a relatively modest drop. While the Dow dipped 49.97 points or 0.3 percent to 17,081.89, the Nasdaq slid 42.03 points or 0.9 percent to 4,796.61 and the S&P 500 slumped 13.77 points or 0.7 percent to 2,003.69.

Uncertainty about the outlook for corporate results likely contributed to the lower close on Wall Street, with earnings season set to pick up steam.

Intel (INTC) and JP Morgan (JPM) are reporting their quarterly results after the close of today's trading, and several other big-name companies will release their results in the coming days.

Before the start of today's trading, healthcare giant Johnson & Johnson (JNJ) reported third quarter earnings that exceeded analyst estimates but on weaker than expected sales.

Johnson & Johnson also raised its full-year earnings guidance and said its board has approved a $10 billion share repurchase.

Lingering concerns about the outlook for the global economy also weighed on the markets following the release of disappointing Chinese trade data.

A report released by China's General Administration of Customs showed that exports fell 3.7 percent year-over-year in the month of September.

While the decrease in exports was smaller than expected, the report also showed a steep 20.4 percent year-over-year drop in imports, which fell for the 11th straight month.

The pullback by stocks may also have reflected profit taking following the upward trend seen over the past several sessions.

Sector News

After trending higher in recent sessions, airline stocks showed a substantial pullback on the day. The NYSE Arca Airline Index plunged by 3.5 percent after ending the previous session at its best closing level in two months.

JetBlue (JBLU) posted a notable loss on the day after JP Morgan Chase downgraded its rating on the discount airline to Neutral from Overweight.

Considerable weakness also emerged among biotechnology stocks, as reflected by the 3.1 percent loss posted by the NYSE Arca Biotechnology Index. Cepheid (CPHD) and Nektar Therapeutics (NKTR) posted steep losses.

Steel stocks also came under pressure over the course of the session, dragging the NYSE Arca Steel Index down by 2.2 percent. With the drop, the index pulled back further off the nearly two-month high set last Friday.

Trucking, pharmaceutical, and housing 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 lower during trading on Tuesday. Japan's Nikkei 225 Index slumped by 1.1 percent, while Hong Kong's Hang Seng Index fell by 0.6 percent.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the German DAX Index and the French CAC 40 Index slid by 0.9 percent and 1 percent, respectively.

In the bond market, treasuries moved moderately higher following yesterday's holiday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dropped by 3.5 basis points to 2.055 percent.

Looking Ahead

Reaction to earnings from Intel and JP Morgan may impact trading on Wednesday, while Bank of America (BAC), Delta Air Lines (DAL), and Wells Fargo (WFC) are also due to report their results before the open. Reports on retail sales and producer prices are also likely to be in focus along with the Federal Reserve's Beige Book, which could shed some light on the outlook for interest rates.