Stocks are seeing continued weakness in mid-afternoon trading on Tuesday, with the major averages stuck firmly in negative territory. With traders continuing to cash in on recent gains, stocks are pulling back further off their recent highs.

In an interview with RTT News, Doug Nardi, portfolio manager at Legg Mason Investment Counsel attributed today's losses to anxiety over the upcoming earnings season, set to kick off after the closing bell tonight.

Nardi said the market is stuck in no man's land right now, between a big move up and the next big hurdle for the market, and predicts it will trade sideways in this environment 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.

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.

In other 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.

The major averages have been more or less rangebound in recent trading, stuck near their worst levels of the day. The Dow is currently down 187.17 at 7,788.68, the Nasdaq is down 44.18 at 1,562.53 and the S&P 500 is down 19.36 at 816.12.

Dow Components

Nearly all of the Dow components are moving lower on the day, contributing to the steep decline by the blue chip index. Of the thirty Dow components, Citigroup (C) is currently the only one moving higher, rising 1.8 percent.

Caterpillar (CAT) is showing one of the widest losses on the session, with the construction equipment maker currently posting a 5.7 percent loss. With the loss, Caterpillar is pulling back further off the nearly two-month closing high it set on Friday.

Shares of General Motors (GM) have also shown a steep decline over the course of the trading day, with the auto giant currently down 12.3 percent. The loss by GM comes as traders continue to worry about the possibility of a bankruptcy filing by the company.

DuPont (DD), General Electric (GE), and Boeing (BA) are also posting considerable losses on the day. DuPont is down 4.8 percent, while General Electric and Boeing are down 4.6 percent and 3.8 percent, respectively.

Sector News

With the overall decline in the broader markets, the vast majority of the major sectors are suffering considerable losses on the day. The real estate sector is producing some of the worst performers of the day.

The weakness in the real estate sector is reflected by the 6.6 percent loss being shown by the Morgan Stanley REIT Index. With the decline, the index has pulled back further off the nearly two-month closing high it set on Friday.

Stocks in the transportation, semiconductor, and wireless sectors are also posting noteworthy losses on the session.

Meanwhile, health insurance and gold stocks are leading the stocks that are bucking the downtrend. The Morgan Stanley Healthcare Payor Index is up 1.3 percent, while the Amex Gold Bugs Index is up 1.4 percent.

Other Markets

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 are off their intraday highs but remain above the unchanged line. Subsequently, the yield on the benchmark 10-year note is down 3.3 basis points at 2.906 percent.

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