While selling pressure has waned from earlier in the session, stocks remain mostly negative in mid-afternoon trading on Tuesday. The major averages have moved off their worst levels of the day, although they remain stuck in the red.

Commenting on the pullback by stocks, Donald Selkin, chief investment strategist at National Securities, noted in an interview with RTT News that the market needs to exhale a little bit and allow for some profit taking.

Selkin suggested that the better strategy is to buy on the pullbacks instead of selling into the rallies. At the same time, while he predicted that the market could end the year nominally higher than current levels, Selkin said he doesn't expect anything huge to the upside.

Stocks saw some strength earlier in the trading session as some traders picked up stocks following the weakness seen in the previous session. Nonetheless, traders sold into the early rally, dragging the major averages well below the unchanged line.

The turnaround was partly due to concerns about the outlook for auto giant General Motors (GM), which has moved sharply lower on the day to reach its lowest levels since the depression.

The loss by GM comes as traders worry that the company is on the verge of filing for bankruptcy after several company executives revealed that they sold almost $315,000 in GM stock and liquidated their remaining direct holdings in the company.

Shares of rival Ford (F) have also come under pressure after the automaker announced a public offering of 300 million shares of its common stock. Ford is currently down 11.5 percent, pulling back further off the ten-month closing high it set last week.

On the economic front, the Commerce Department released a report showing that the U.S. trade deficit for March came in wider than in the previous month, with the value of exports falling by more than the value of imports.

The report showed that the trade deficit widened to $27.6 billion in March from a revised $26.1 billion in February. Economists had expected the deficit to widen to $29.0 billion compared to the $26.0 billion originally reported for the previous month.

In other news, the Senate Finance Committee held its final Health Care Roundtable Discussion Tuesday, focusing on how to finance comprehensive health care reform. The roundtable concluded a series aimed at helping the committee offer health care reform legislation by June.

Experts and lawmakers discussed the cost of the proposals that they have considered in recent weeks, with committee chairman Max Baucus, D-Mont noting that they are not cheap.

The major averages are currently all trading below the unchanged line, although the Dow is posting only a modest loss. While the Dow is down 10.67 at 8,408.10, the Nasdaq is down 24.25 at 1,706.99 and the S&P 500 is down 7.11 at 902.13.

Dow Components

While the Dow components are turning in a roughly mixed performance, notable losses by several of the blue chip stocks are helping to keep the index in the red.

As mentioned above, General Motors is turning in one of the Dow's worst performances, with the auto giant currently down 22.2 percent. With the loss, shares of GM have fallen to their worst intraday level since April of 1933.

Bank of America (BAC), JP Morgan (JPM), and Citigroup (C) are also posting significant losses, reflecting considerable weakness in the banking sector. Shares of General Electric (GE) have also come under pressure, falling 4.9 percent.

Meanwhile, a strong gain by Pfizer (PFE) has helped to limit the downside for the Dow, with the drug giant currently up 4.9 percent. The gain by Pfizer comes after a Credit Suisse analyst made some positive comments about the company's planned acquisition of rival Wyeth (WYE).

Coca-Cola (KO) and Microsoft (MSFT) are also posting strong gains in mid-afternoon trading, with shares of Coca-Cola up 2.8 percent and shares of Microsoft up 2.3 percent.

Sector News

Banking stocks continue to turn in some of the market's worst performances, as traders continue to cash in the recent strength in the sector. Within the sector, MGIC Investment (MTG) is down 11.7 percent after ending the previous session at a nearly seven-month closing high.

Significant weakness also remains visible among airline stocks, as reflected by the 5.5 percent loss currently being shown by the Amex Airline Index. The weakness in the oil-sensitive airline sector comes as the price of oil is extending a recent upward move.

A variety of other sectors are also showing notable moves to the downside, with housing, electronic storage, and semiconductor stocks posting notable losses.

On the other hand, gold stocks continue to post strong gains, moving higher along with the price of the precious metal. Some pharmaceutical and tobacco stocks are also bucking the downtrend by the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Hong Kong's Hang Seng Index edged up 0.4 percent, Japan's benchmark Nikkei 225 Index fell 1.6 percent.

Meanwhile, the major European markets ended the day in the red after seeing some choppy trading. While the U.K.'s FTSE 100 Index fell 0.2 percent, the French CAC 40 Index and the German DAX Index closed down 0.5 percent and 0.3 percent, respectively.

In the bond market, treasuries have turned higher over the course of the trading day after seeing some early weakness. Subsequently, the yield on the benchmark ten-year note is currently down 1.8 basis points at 3.162 percent after reaching a high of 3.226 percent.

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