Stocks Remain Sharply Lower After Early Sell-Off - U.S. Commentary

(RTTNews) - After falling sharply early in the session, stocks continue to see substantial weakness in mid-day trading on Tuesday. The major averages are all posting steep losses on the day after closing mixed for two consecutive sessions.

Currently, the major averages are off their worst levels of the day but remain firmly negative. The Dow is down 493.65 points or 2 percent at 24,823.76, the Nasdaq is down 160.38 points or 2.2 percent at 7,308.25 and the S&P 500 is down 54.74 points or 2 percent at 2,701.14.

The sell-off on Wall Street reflects an extension of the significant weakness seen in overseas markets, which came amid worries about global economic growth and mounting geopolitical tensions.

A negative reaction to quarterly results from some big-name companies is also contributing to sharp decline by stocks.

Shares of Caterpillar (CAT) have plummeted by 8 percent even though the heavy equipment maker reported third quarter results that exceeded analyst estimates.

Investors seem disappointed Caterpillar reaffirmed its full-year earnings guidance rather than raising its forecast. The company's comments about the impact of tariffs may also be weighing on the stock.

Diversified manufacturer 3M Co. (MMM) has also plunged by 6.6 percent after reporting weaker than expected third quarter results and cutting its full-year guidance.

On the other hand, shares of McDonald's (MCD) have moved sharply higher after the fast food giant reported quarter earnings and revenues that beat expectations.

Sector News

Energy stocks continue to turn in some of the market's worst performances in mid-day trading amid a steep drop by the price of crude oil. Crude for December delivery is plunging $2.44 to $66.92 a barrel after Saudi Arabia's Energy Minister sought to reassure the markets about supply.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 4.8 percent, the NYSE Arca Natural Gas Index is down by 4.1 percent and the NYSE Arca Oil Index is down by 3.8 percent.

Substantial weakness is also visible among computer hardware stocks, as reflected by the 3.8 percent slump by the NYSE Arca Computer Hardware Index. The index hit an eleven-month intraday low earlier in the session.

Within the hardware sector, Logitech (LOGI) is posting a particularly steep loss after the computer accessories maker reported strong fiscal second quarter results but maintained rather than boosting its full-year guidance.

Transportation, steel, chemical, and software stocks are also seeing considerable weakness, while gold and housing stocks are among the few groups bucking the broad-based sell-off on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Tuesday. Japan's Nikkei 225 Index tumbled by 2.7 percent, while Hong Kong's Hang Seng Index plummeted by 3.1 percent.

The major European markets also saw considerable weakness on the day. While the German DAX Index plunged by 2.2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index slumped by 1.7 percent and 1.2 percent, respectively.

In the bond market, treasuries have moved significantly higher amid the sell-off on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.6 basis points at 3.120 percent.
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