WASHINGTON (dpa-AFX) - Stocks have moved mostly lower during trading on Tuesday, extending the downward move seen over the two previous sessions. The major averages regained some ground after an early slump but have moved back to the downside since then.
Currently, the major averages are all firmly in negative territory. The Nasdaq is down 220.74 points or 0.8 percent at 26,150.15, the S&P 500 is down 39.35 points or 0.5 percent at 7,646.79 and the Dow is down 205.83 points or 0.4 percent at 52,980.07.
A continued spike by the price of crude oil is weighing on Wall Street amid lingering concerns about the re-escalation of the conflict in the Middle East.
U.S. crude oil futures are currently jumping by 2.6 percent on the day after surging by nearly 3 percent in the previous session.
The increase in crude oil prices has led to renewed concerns about the outlook for inflation and the possibility of an interest rate hike by the Federal Reserve at its next meeting later this month.
Worries about higher interest rates have also contributed to an extended advance by treasury yields, with the yield on the benchmark ten-year note reaching its highest level since January 2025 before giving back ground.
'Long-term US yields are still historically high having risen last week despite Treasury's expanded buyback programme, suggesting the pressure extends beyond expectations for Fed policy,' Daniela Hathorn, Senior Market Analyst at Capital.com.
She added, 'Heavy government borrowing, elevated term premium and growing competition for capital continue to underpin yields, creating a less comfortable environment for highly valued equities.'
Stocks staged a recovery attempt following the release of a report from the Institute for Supply Management showing a bigger slowdown in the pace of growth in U.S. service sector activity.
The ISM said its manufacturing PMI dipped to 54.6 in August from 55.6 in July, although a reading above 50 still indicates growth. Economists had expected the index to edge down to 55.2.
Ahead of the release of the more closely watched monthly jobs report on Friday, traders may feel signs of economic weakness may keep the Fed from raising rates.
Sector News
Gold stocks have moved sharply lower along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 2.6 percent.
Networking and software stocks are also seeing substantial weakness, with the NYSE Arca Networking Index and the Dow Jones U.S. Software Index tumbling by 2.4 percent and 2.3 percent, respectively.
Semiconductor, transportation and housing stocks have also shown significant moves to the downside, while pharmaceutical and oil producer stocks are bucking the downtrend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both dipped by 0.2 percent, while Hong Kong's Hang Seng Index slumped by 0.9 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index is down by 1.2 percent, the French CAC 40 Index is down by 0.6 percent and the U.K.'s FTSE 100 Index is down by 0.5 percent.
In the bond market, treasuries have climbed well off their worst levels but are still modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.2 basis points at 4.770 percent.
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