Stocks Remain Firmly In The Red Following Early Sell-Off - U.S. Commentary

(RTTNews) - After coming under pressure early in the session, stocks continue to see significant weakness in mid-day trading on Tuesday. The Dow continues to pull back off the record closing high it set a week ago, while the S&P 500 is pulling back further off the record closing high it set last Thursday.

The major averages have moved roughly sideways in recent trading, stuck firmly in negative territory. The Dow is down 186.71 points or 1 percent at 18,045.31, the Nasdaq is down 56.32 points or 1.1 percent at 5,033.05 and the S&P 500 is down 20.12 points or 1 percent at 2,105.94.

The sell-off on Wall Street comes following the release of a batch of largely upbeat U.S. economic data, which has led to concerns about the outlook for interest rates.

The Commerce Department released a report this morning showing a bigger than expected rebound in new home sales in the month of April.

The report said new home sales climbed 6.8 percent to an annual rate of 517,000 in April from the revised March rate of 484,000. Economists had expected new home sales to rise to a rate of 509,000.

A separate Commerce Department report showed a modest drop in durable goods orders in April, although the decrease largely reflected a pullback in the volatile transportation sector.

Orders excluding transportation rose by more than expected, and the report also showed a continued increase by a key reading on capital spending.

Additionally, the Conference Board released a report showing an unexpected uptick in consumer confidence in the month of May.

The data has led to worries that an interest rate hike could still be on the table at the next Federal Reserve meeting in a few weeks.

In remarks in Israel on Monday, Fed Vice Chairman Stanley Fischer stressed that monetary policy would be driven by data and not the date.

Sector News

Most of the major sectors have moved to the downside on the day, reflecting the broad based weakness on Wall Street.

Gold stocks continue to post particularly steep losses, with the NYSE Arca Gold Bugs Index plunging by 3.3 percent. The index has fallen to its worst intraday level in well over a month.

The weakness among gold stocks comes amid a notable decrease by the price of the precious metal, as gold for June delivery is falling $16.90 to $1,187.10 an ounce.

Significant weakness has also emerged among oil service stocks, which are moving lower along with the price of crude oil. With crude for July delivery tumbling $1.61 to $58.11 a barrel, the Philadelphia Oil Service Index is down by 2 percent.

Airline stocks are also seeing considerable weakness in mid-day trading, as reflected by the 2 percent loss being posted by the NYSE Arca Airline Index. The drop has pulled the index down to a five-month low.

Steel, natural gas, computer hardware, and railroad stocks have also shown notable moves to the downside on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent.

Meanwhile, the major European markets all came under pressure on the day. While the French CAC 40 Index dropped by 0.7 percent, the U.K.'s FTSE 100 Index slumped by 1.2 percent and the German DAX Index tumbled by 1.6 percent.

In the bond market, treasuries have moved notably higher despite the slew of upbeat economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.5 basis points to 2.16 percent.