Stocks Close Mostly Lower But Dow Manages Slim Gain - U.S. Commentary

(RTTNews) - Following the rally seen in the previous session, stocks moved mostly lower during trading on Tuesday. The Nasdaq and the S&P 500 ended the day in negative territory, although the Dow managed to close modestly higher.

While the Dow inched up 13.76 points or 0.1 percent to 16,790.19, the Nasdaq slid 32.90 points or 0.7 percent to 4,748.36 and the S&P 500 fell 7.13 points or 0.4 percent to 1,979.92.

The weakness on Wall Street was largely due to profit taking, as traders cashed in on the strong upward move seen over the two previous sessions.

Uncertainty about the upcoming earnings season also weighed on the markets, with Alcoa (AA) due to kick off the reporting season after the close of trading on Thursday.

However, the Dow was supported by a significant advance by shares of DuPont (DD), as the chemical giant surged up by 7.7 percent.

The jump by DuPont came after chairman and Chief Executive Officer Ellen Kullman announced plans to retire later this month.

On the U.S. economic front, the Commerce Department released a report showing that the U.S. trade deficit widened significantly in the month of August.

The report said the trade deficit widened to $48.3 billion in August from a revised $41.8 billion in July. The deficit had been expected to widen to $48.0 billion.

The wider trade deficit came as the value of imports climbed 1.2 percent to $233.4 billion, while the value of exports fell 2 percent to $185.1 billion.

Sector News

Biotechnology stocks showed a substantial move to the downside on the day, contributing to the drop by the Nasdaq. Reflecting the weakness in the biotech sector, the NYSE Arca Biotechnology Index plummeted by 4.8 percent.

Exact Sciences (EXAS) helped to lead the biotech sector lower, plunging by 46.1 percent on news a panel of experts did not include the company's Cologuard on a list of recommended colon cancer screening tests.

Considerable weakness was also visible among airline stocks, as reflected by the 2.8 percent loss posted by the NYSE Arca Airline Index. Alaska Air Group (ALK) and China Southern Airlines (ZNH) turned in two of the sector's worst performances.

Housing, pharmaceutical, and retail stocks also saw significant weakness on the day, while strength was visible among energy, gold and computer hardware stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index advanced by 1 percent, while Australia's All Ordinaries Index rose by 0.3 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the German DAX Index climbed by 0.9 percent and the French CAC 40 Index jumped by 1 percent.

In the bond market, treasuries turned modestly higher after seeing initial weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.1 basis points to 2.035 percent.

Looking Ahead

Trading on Wednesday may be somewhat subdued amid a lack of major U.S. economic data, with traders looking ahead to the start of earnings season.