Stocks have shown a notable decline over the course of the trading day on Tuesday, with the major averages all moving firmly into negative territory after ending the previous session mixed. Some traders are cashing on the strong gains posted over the course of the past month.
Before the start of trading, the Commerce Department released a report showing a 1.1 percent decline in retail sales in March following an upwardly revised 0.3 percent increase in February. The decrease came as a surprise to economists, who had expected sales to increase by 0.3 percent.
The unexpected drop in retail sales was partly due to a 5.9 percent drop in sales by electronics and appliance stores. Auto sales also showed a notable decrease for the month.
Separately, the Labor Department said that its producer price index fell 1.2 percent in March compared to economist estimates of a flat reading. Core producer prices, which exclude food and energy prices, were unchanged compared to the previous month.
In corporate news, Goldman Sachs (GS) saw a first quarter profit that rose year-over-year and came in well above analyst estimates. The company also said that it has started a $5 billion public offering of its common stock, which may be used to repay TARP funds.
Additionally, Johnson & Johnson (JNJ) also released first quarter results that exceeded analyst estimates. The company posted earnings of $1.26 per share compared to the $1.22 per share that was anticipated.
In other news, Federal Reserve Chairman Ben Bernanke said earlier that there have been tentative signs of a slowing in the steep economic decline, offering hope that the worst of the recession may be drawing to a close.
Speaking at Atlanta's Morehouse College, Bernanke also addressed the Fed's continued commitment to prices stability, although he noted that inflation is likely to remain exceptionally low for some time.
Meanwhile, President Barack Obama described in detail the five pillars on which he plans to rebuild the U.S. economy Tuesday, pledging that his administration is working to promote regulatory reform, education, health care, clean energy, and financial market stabilization.
In a speech at Georgetown University in Washington, Obama discussed his goals for the administration, although he did not propose any new policies.
Obama pledged to get serious about reforming programs that can involve wasteful spending, reflecting his campaign promise to go through the budget line by line and weed out the bad programs.
The major averages have moved to the upside in recent trading, although they remain stuck well below the unchanged line. The Dow is currently down 112.06 at 7,945.75, the Nasdaq is down 25.61 at 1,627.70 and the S&P 500 is down 13.60 at 845.13.
A vast majority of the Dow components are trading in negative territory, contributing to the steep loss by the blue chip index. Financial stocks within the Dow are posting notable losses after moving sharply higher in recent sessions.
JP Morgan (JPM) is showing one of the worst performances, with the financial services giant currently posting a 5.7 percent loss. With the decline, the stock is pulling back well off the four-month closing high it set in the previous session.
Within the financial sector, American Express (AXP) and Bank of America (BAC) are also posting significant losses. Shares of American Express are currently down 7.5 percent, while shares Bank of America are falling 4.5 percent.
General Electric (GE), Alcoa (AA), and AT&T (T) are among the other Dow components that are posting notable losses on the day.
At the other end of the spectrum, Citigroup (C) is bucking the downtrend in the financial sector with a gain of 6.1 percent on the session. Additionally, General Motors (GM) is up 6.4 percent.
After posting strong gains in the two previous sessions, banking stocks are posting particularly steep losses in mid-afternoon trading. With the weakness in the sector, the S&P Banks Index is down 6.1 percent, pulling back well off the three-month closing high it set on Monday.
Real estate, airline, and housing stocks are also helping to lead the broader markets lower. The Morgan Stanley REIT Index is down 6.6 percent, while the Amex Airline Index and the Philadelphia Housing Index are down 4.2 percent and 4.1 percent, respectively.
While brokerage, tobacco, and steel stocks are also showing notable declines, healthcare provider stocks are posting significant gains, driving the Morgan Stanley Healthcare Provider Index up 3.4 percent.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Tuesday, with financial stocks leading the way higher following the release of the better than expected results from Goldman Sachs.
Additionally, after some uncertainty, the major European markets ended the session in positive territory. The U.K.'s FTSE 100 ended the session up 0.1 percent, while the German DAX Index and the French CAC 40 Index posted gains of 1.5 percent and 0.9 percent, respectively.
In the bond market, treasuries are holding near their highs of the day, driving the yield on the benchmark 10-year note down 5.9 basis points to 2.786 percent.
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