Stocks fell on Tuesday, with financial shares giving up some of the previous day's surge as investors assessed government plans to shore up the economy and resource shares fell alongside commodity prices.
The energy sector led the way down as U.S. crude futures retreated from a run-up in the previous session and fell below $53 a barrel while the dollar strengthened. Exxon Mobil
Financial shares <.GSPF> slipped 1.5 percent after a double digit surge on Monday, when long awaited details on the government's plan to clean up sour assets from bank balance sheets were released.
Stocks have rallied off 12-year lows in recent weeks in the wake of aggressive moves from policy-makers to stabilize the economy, as well as comments from some major banks that they were profitable in the first two months of the year.
It's usually when there's extreme panic and questions about the overall economic system, like we saw in late February and early March, that bottoms are made, said Tim Ghriskey, chief investment officer of Solaris Asset Management. in Bedford Hills, New York.
I don't think that means we're off to races and we're going to see a major rally here, but there are certainly signs of better times ahead.
Stocks surged about 7 percent on Monday, helping lift the benchmark S&P 500 index more than 20 percent from the bear market closing low set on March 9, but the index remains off nearly 10 percent for the year.
By mid-morning on Tuesday the Dow Jones industrial average <.DJI> was down 70.65 points, or 0.91 percent, to 7,705.21. The Standard & Poor's 500 Index <.SPX> was down 8.77 points, or 1.07 percent, at 814.15. The Nasdaq Composite Index <.IXIC> gave up 20.51 points, or 1.32 percent, at 1,535.26.
As investors kept their eyes trained on maneuvers out of Washington, Treasury Secretary Timothy Geithner called for authority to wind down failing non-bank financial firms that threaten the financial system in testimony before the U.S. House of Representatives Financial Services Committee.
Among financial shares, Bank of America
(Editing by Chizu Nomiyama)