RTTNews - Stocks are seeing considerable weakness in mid-afternoon trading on Tuesday, adding to the steep losses posted in the previous session. After seeing early strength, the major averages have all moved firmly into negative territory, as buying interest has waned despite largely positive economic data.

With new construction of multi-family homes showing a substantial increase in the month of May, the Commerce Department released a report on Tuesday showing a much bigger than expected increase in housing starts.

Separately, a report from the Labor Department showed that wholesale prices rose much less than expected last month, easing concerns that inflation pressures will force authorities to back off their stimulus efforts to keep prices in check.

Some of the optimism was mitigated by a report on industrial production from the Federal Reserve, with production falling by a little more than economists had been anticipating.

The major averages have moved off their worst levels of the day in recent trading, also they remain sharply lower. The Dow is currently down 83.58 at 8,528.55, the Nasdaq is down 15.58 at 1,800.80 and the S&P 500 is down 9.60 at 914.12.

Dow Components

Most of the Dow components are trading in negative territory, resulting in the steep loss being shown by the blue chip index in mid-afternoon trading.

Bank of America (BAC) has helped to lead the Dow lower, with the financial services giant currently down 4.1 percent on the day. The day's pullback has taken the stock further away from the one-month closing high it set last Friday.

Weakness is also visible in shares of Alcoa (AA) and Disney (DIS), which are down by 3.1 percent and 3 percent, respectively. General Electric (GE) and Home Depot (HD) are also posting notable losses.

Despite the retreat by most of the Dow components, shares of Microsoft (MSFT) are on the rise, climbing by 0.8 percent. With the advance, the stock is extending a recent upward move, rising to its best intraday level in over seven months.

IBM (IBM), Johnson & Johnson (JNJ), and Pfizer (PFE) are also posting modest gains, helping to limit the downside for the Dow.

Sector News

A vast majority of the major sectors have moved lower over the course of the trading day, prompting the disappointing performance in equities on the day.

Some of the day's heaviest losses are coming from retail stocks, with the S&P Retail Index dropping by 2.9 percent on the day. With the loss, the index is moving further off the eight-month closing high set earlier this month.

Some resource stocks are also seeing continued weakness in today's session. Oil service and natural gas stocks are suffering steep losses on the day, with the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index falling by 2.9 percent and 2.3 percent, respectively.

With the decline, the indices are seeing their third day of losses in a row, backing off of the multi-month highs set late last week.

While financial, housing, and semiconductor stocks have also come under pressure, health insurance stocks are bucking the downtrend. The Morgan Stanley Healthcare Payor Index is up 2.5 percent, bouncing off the one-month closing low set in the previous session.

In Focus: Economic Data, Earnings, Fed Buyback

Ahead of the opening bell on Wall Street, the Commerce Department released a report showing that housing starts rose 17.2 percent to an annual rate of 532,000 units in May from the revised April estimate of 454,000. Economists had expected starts to rise to 485,000 from the 458,000 originally reported for the previous month.

While single-family starts showed a notable 7.5 percent increase in May, the jump in housing starts was due in large part to a 77.1 percent increase in buildings with five units or more.

Separately, the Labor Department revealed that producer prices rose 0.2 percent in May. This followed a 0.3 percent increase for April and came in below economist estimates of a 0.6 percent increase.

Core producer prices, which leave out the impact of volatile food and energy prices, edged down by 0.1 percent for May. In April, the figure was up by 0.1 percent.

Meanwhile, the Federal Reserve revealed that industrial production fell by 1.1 percent in May following a revised 0.7 percent decrease in April. Economists had been expecting production to fall 1.0 percent compared to the 0.5 percent drop originally reported for the previous month.

The report also showed that capacity utilization fell to 68.3 percent in May from a revised 69.0 percent in the previous month. The capacity utilization rate had been expected to slip to 68.4 percent from the 69.1 percent originally reported for April.

In corporate news, Best Buy (BBY) reported adjusted first quarter earnings of $0.42 per share compared to $0.43 per share last year. Wall Street analysts expected the firm to report earnings of $0.34 per share.

While the consumer electronics retailer reported better than expected first quarter earnings, it reaffirmed its full year earnings guidance. Subsequently, shares of Best Buy are down 7.4 percent on the news.

On the other hand, shares of La-Z-Boy (LZB) are up 20.3 percent after the furniture maker reported fourth quarter earnings of $0.10 per share compared to a loss of $0.09 per share in the same quarter last year. The earnings surprised analysts, who had expected the firm to post a loss of $0.11 per share.

In other news, the Federal Reserve continued its treasury buyback program Tuesday, completing its first quantitative easing move of the week. The New York Federal Reserve purchased $6.45 billion worth of securities with maturity dates ranging from May of 2012 to November of 2013.

The day's buyback saw a total of $31.32 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $162.97 billion since the program began on March 25th.

Other Markets

In overseas trading, stock markets across the Asia Pacific region ended Tuesday's trading on the downside. Japan's benchmark Nikkei 225 Index closed down by 2.9 percent and Hong Kong's Hang Seng finished down by 1.8 percent.

Meanwhile, the major European markets turned in a mixed performance. While the German DAX Index and the U.K.'s FTSE 100 Index both finished just above the unchanged line, the French CAC 40 fell by 0.2 percent on the day.

In the bond markets, treasuries are higher, buoyed by the Fed's quantitative move late this morning. Subsequently, the yield on the benchmark ten-year note is down to 3.672 percent, a drop of 4.1 basis points on the day.

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