After moving higher at open, stocks have pulled back into negative territory over the course of the trading day on Tuesday and are seeing some further downside in early afternoon trading. Buying interest waned shortly after the open as some traders decided to do some profit taking on the day.
Traders are cashing in recent gains ahead of key market moving economic and earnings data set to be released in the second half of the week.
Shares of General Motors (GM) are seeing significant weakness, falling to a multi-decade low of $1.10 amid increasing prospects of bankruptcy for the U.S. auto giant. The move further accelerated after seven GM executives sold their holdings.
In related news, shares of auto giant Ford (F) are moving lower in afternoon dealing as the firm announced a $300 million share offering, intending to use the proceeds for general corporate purposes in addition to funding employee benefit obligations. Shares of Ford are down 9.9 percent on the news.
Bank of America (BAC) is also seeing some weakness amid reports that the company raised $7.3 billion by selling 13.5 billion shares of China Construction Bank. The company reportedly sold the shares at a 14 percent discount to their Monday close.
In earnings news, bond insurer MBIA Inc. (MBI) reported first quarter earnings of $3.34 per share compared to a year-ago loss of $12.92 per share. Nonetheless, shares of MBIA have turned lower over the course of the session and are currently down 6.8 percent.
Meanwhile, engineering and construction firm Fluor Corp. (FLR) reported first quarter earnings that rose 50 percent from last year, helped by solid contributions from its oil and gas segments. However, the company cut its full year 2009 earnings outlook, pressured by recent project cancellations.
Other earnings data will come from the nation's largest retailers, with Wal-Mart (WMT), J.C. Penney (JCP), Macy's (M), and Abercrombie & Fitch (ANF) set to report later this week. The companies are scheduled to release their reports in the second half of the week.
On the economic front, the U.S. Commerce Department released its report on international trade, which showed the trade deficit at $27.58 billion for March compared to February's deficit of $26.13 billion. Analysts had expected the deficit to widen to $29.0 billion.
Earlier in the day, traders looked to comments from Federal Reserve Chairman Ben Bernanke, who said he is encouraged by early signs of the ability of major banks to raise new capital in the aftermath of recently performed stress tests.
The major averages have seen some further downside in recent trading, pulling back to new lows for the session. The Dow is currently down 33.69 at 8,385.08, the Nasdaq is down 28.78 at 1,702.46 and the S&P 500 is down 9.42 at 899.82.
Airline stocks are turning in some of the market's worst performances, with the Amex Airline index down 5.9 percent, pulling back further off the nearly three-month closing high it set last week. Airlines have dipped as the price of oil has risen, adding to recent gains and reaching a fresh 6-month high.
The airline index has been weighed down by shares of JetBlue Airways (JBLU), which are down 10.1 percent on the day. With the decline, JetBlue has continued to move away from a three-month high set late last week. Notable weakness has also emerged in shares of AMR Corp. (AMR) and UAL Corp. (UAUA).
Significant weakness has also emerged among banking stocks, with the KBW Bank Sector index down by 7.1 percent. With the retreat, the index continues to pull back off the 4-month closing high set last Friday.
Pulling the sector index lower are shares of Regions Financial Corp. (RF), which are down by 13.5 percent. The move has been precipitated by the prospect of forthcoming charges against the firm from the Securities and Exchange Commission.
Additional losses have come from housing and semiconductor stocks, with the Philadelphia Housing Index and the Philadelphia Semiconductor Index down by 4.2 and 3.9 percent, respectively.
On the other hand, gold stocks continue to buck the downtrend by the broader markets, benefiting from an increase by the price of gold. The Amex Gold Bugs Index is currently up 3.3 percent, as gold for June delivery is up $8.50 at $922 an ounce.
Stocks in the News
Despite the weakness in the broader markets, shares of retailer Winn-Dixie Stores Inc. (WINN) are up 25.4 percent on better-than-expected earnings news. The firm reported third quarter net income of $0.30 per share compared to $0.28 in the year ago quarter. Analysts had expected far more modest earnings of $0.12 per share.
Additionally, shares of Ctrip.com International Ltd. (CTRP) are up by 16.4 percent on the day. The move comes after the company reported higher first quarter earnings compared to the year-ago quarter. The stock has also seen further upside as Citigroup upgraded shares from a sell to a buy rating.
On the other hand, shares of Rosetta Stone Inc. (RST) are down by 8.4 percent after the firm forecast a second quarter loss on the heels of reporting first quarter earnings. With the retreat, the stock has returned to late April levels.
In overseas trading, stock markets across the Asia-Pacific region closed largely mixed on Tuesday, with Hong Kong's Hang Seng Index rising 0.3 percent. However, Japan's benchmark Nikkei 225 Index finished considerably lower, finishing down by 1.6 percent.
Meanwhile, the major European markets also closed in negative territory, with the U.K.'s FTSE 100 Index falling 0.2 percent, while the French CAC 40 Index and the German DAX Index slipping 0.5 percent and 0.3 percent, respectively.
In the bond markets, treasuries are lingering near the unchanged, with the yield on the benchmark ten-year note at 3.178 percent, down less than a basis point on the day.
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