WASHINGTON (dpa-AFX) - After moving to the upside early in the session, stocks have come under pressure over the course of morning trading on Tuesday. The major averages have pulled back well off their highs of the session and into negative territory.
Currently, the major averages remain in the red. The Dow is down 129.13 points or 0.5 percent at 26,787.70, the Nasdaq is down 6.11 points or 0.1 percent at 7,993.22 and the S&P 500 is down 7.84 points or 0.3 percent at 2,968.90.
The downturn by stocks came following the release of a report from the Institute for Supply Management showing a continued contraction in U.S. manufacturing activity in the month of September.
The ISM said its purchasing managers index dropped to 47.8 in September from 49.1 in August, with a reading below 50 indicating a contraction in manufacturing activity. Economists had expected the index to inch up to 50.1.
With the unexpected decrease, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.
Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, noted the contraction continues six straight months of softening in manufacturing.
'Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019,' Fiore said. 'Overall, sentiment this month remains cautious regarding near-term growth.'
The new export orders index slid to 41.0 in September from 43.3 in August, falling to its lowest level since hitting 39.4 in March of 2009.
Economists noted the disappointing data may also reflect the ongoing strike at General Motors (GM), which has also begun to affect production at suppliers.
Brokerage stocks have shown a substantial move to the downside in morning trading, dragging the NYSE Arca Broker/Dealer Index down by 4.8 percent to its lowest intraday level in nearly a month.
Online brokers are falling sharply after Charles Schwab (SCHW) announced plans to eliminate online trade commissions for U.S. stocks, exchange traded funds and options as part of an escalating price war.
Chemical, banking and tobacco stocks have also moved to the downside on the day, while gold stocks are rebounding following yesterday's sell-off.
After plunging by 3.5 percent on Monday, the NYSE Arca Gold Bugs Index has surged up by 1.8 percent amid a notable rebound by the price of gold.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, with markets in China and Hong Kong closed for holidays. Japan's Nikkei 225 Index climbed by 0.6 percent, while Australia's All Ordinaries Index advanced by 0.8 percent.
Meanwhile, the major European markets have shown modest moves to the downside on the day. While the U.K.'s FTSE 100 Index is just below the unchanged line, the German DAX Index and the French CAC 40 Index are both down by 0.1 percent.
In the bond market, treasuries have shown a significant turnaround following the weak manufacturing data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.3 basis points at 1.642 percent.
Copyright RTT News/dpa-AFX
© 2019 AFX News
