After ending the previous session mostly lower, stocks saw some further downside during trading on Tuesday. The major averages all ended the day firmly in negative territory, pulling back further off their recent highs, as traders continued to do some profit taking.

Stocks showed a notable decline in early trading but moved roughly sideways before seeing some further downside in the early afternoon. The Dow eventually ended the day down more than 180 points, moving well off the nearly two-month closing high it set last Friday.

The continued weakness in the markets came as traders expressed some anxiety about the upcoming earning season and stocks' ability to sustain the recent upward move in light of expectations of weak quarterly results.

Dow component Alcoa (AA) is scheduled to release its first quarter results after the close of trading, with the release of results from the aluminum producer seen as the unofficial start of the earnings reporting season.

Alcoa has said its first quarter results would continue to be negatively affected by the troubled global economic environment that has adversely affected pricing and demand for aluminum, alumina, and aluminum products.

However, with most companies expected to report disappointing first quarter results due to the weakness in the economy, the guidance provided by the companies is likely to have a more significant impact on the markets.

Some selling pressure was also generated by a report from the Times of London, which said that new forecasts from the International Monetary Fund are expected to suggest that toxic debts racked up by banks and insurers could spiral to $4 trillion.

In other corporate news, Royal Bank of Scotland (RBS) announced that it has begun consulting Unite and other employee representatives about a business plan for its back office operations that will involve job losses.

The bank said that the plan could affect up to 9,000 jobs over the next two years, including 4,500 in the U.K. However, the actual number of jobs lost is expected to be significantly lower.

Doug Nardi, a portfolio manager at Legg Mason Investment Counsel, told RTT News that the market is stuck in a no man's land between a big move up and the next big hurdle for the market, and he predicted that stocks would trade sideways until earnings outlooks are released.

However, Nardi added, There's absolutely a possibility that there's an upside to the earnings season, suggesting that investors with cash on the sidelines should buy on down days.

The major averages all posted steep losses on the day, with the Dow closing down 186.29 points or 2.3 percent at 7,789.56, while the Nasdaq closed down 45.10 points or 2.8 percent at 1,561.61 and the S&P 500 closed down 19.93 points or 2.4 percent at 815.55.

In overseas trading, stock markets across the Asia-Pacific region closed mostly lower on Tuesday, although selling pressure was generally subdued. Japan's benchmark Nikkei 225 Index ended the session down 0.3 percent.

The major European markets also closed lower on the day. The U.K.'s FTSE 100 Index ended the session down 1.6 percent, while the French CAC 40 Index and the German DAX Index fell 0.9 percent and 0.6 percent, respectively.

In the bond market, treasuries ended the session well off their intraday highs but held above the unchanged line. Subsequently, the yield on the benchmark 10-year note closed down 3 basis points at 2.909 percent.

Transportation stocks saw considerable weakness throughout the trading session, resulting in a 4.3 percent loss by the Dow Jones Transportation Average. With the loss, the average pulled back further off the nearly two-month closing high it set on Friday.

YRC Worldwide (YRCW) helped to lead the transportation sector lower, with trucking company closing down 25.3 percent after saying that it expects to report first quarter charges of up to $185 million as a result of an ongoing restructuring and the uncertain U.S. economy.

Real estate and housing stocks also posted considerable losses on the session, as reflected by the 8.9 percent loss suffered by the Morgan Stanley REIT Index and the 6 percent loss posted by the Philadelphia Housing Index.

A variety of other sectors also showed notable downward moves over the course of the trading day, with electronic storage, semiconductor, and wireless stocks posting notable losses.

Within the wireless sector, Nokia (NOK) closed down 4.9 percent after WestLB downgraded its rating on the mobile phone maker to Sell from Neutral.

Meanwhile, health insurance stocks bucked the downtrend by the broader markets, resulting in a 1.3 percent gain by the Morgan Stanley Healthcare Payor Index. More modest strength was also visible in the gold and tobacco sectors.

By the end of the trading day, nearly all of the Dow components were in negative territory, contributing to the steep decline by the blue chip index. General Motors (GM) helped to lead the Dow lower amid continued bankruptcy concerns, ending the day down 11.9 percent.

As mentioned above, trading on Wednesday is likely to be impacted by the release of Alcoa's first quarter results after the close of trading today.

While Bed Bath and Beyond (BBBY) is also due to release its quarterly results after the close, Family Dollar (FDO) and Constellation Brands (STZ) are among the companies due to release their results before Wednesday's open.

On the economic front, the Mortgage Bankers Association's weekly mortgage applications report will be released at 7 am ET, while the Commerce Department's wholesale inventories report for February is due at 10 am ET.

Additionally, the Federal Reserve will release the minutes of the latest policy-setting meeting at 2 pm ET.

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