Stocks Mostly Negative But Off Early Lows - U.S. Commentary

(RTTNews) - After seeing a sharp drop at the open, stocks have regained some ground but remain mostly negative in early trading.

The major averages have climbed off their early lows but are still in the red. The Dow is down 78.99 points or 0.5 percent at 17,658.01, the Nasdaq is down 27.56 points or 0.6 percent at 4,864.24 and the S&P 500 is down 15.47 points or 0.8 percent at 2,050.66.

The early weakness on Wall Street comes as the overseas markets have moved mostly lower amid concerns about the global economy.

The U.S. economy continues to outperform, however, with a report from the Institute for Supply Management showing slightly faster than expected growth in the service sector.

The ISM said its non-manufacturing index climbed to 54.5 in March from 53.4 in February, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 54.0.

"According to the NMI, 12 non-manufacturing industries reported growth in March," said Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee.

He added, "The majority of respondents' comments indicate that business conditions are mostly positive and that the economy is stable and will continue on a course of slow, steady growth."

Reflecting the strength of the U.S. economy versus the rest of the world, a separate report from the Commerce Department showed that the U.S. trade deficit widened by more than expected.

The Commerce Department said the trade deficit widened to $47.1 billion in February from a revised $45.9 billion in January.

Economists had expected the deficit to widen to $46.2 billion from the $45.7 billion originally reported for the previous month.

Brokerage stocks are turning in some of the worst performances in early trading, resulting in a 1.9 percent drop by the NYSE Arca Broker/Dealer Index.

Utilities, banking and drug stocks are also seeing notable weakness, while strength is visible among gold and biotech stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index plunged by 2.4 percent, while Hong Kong's Hang Seng Index tumbled by 1.6 percent.

The major European markets have also come under pressure on the day. While the U.K.'s FTSE 100 Index is down by 1.1 percent, the French CAC 40 Index and the German DAX Index are down by 2.1 percent and 2.4 percent, respectively.

In the bond market, treasures have shown a strong move to the upside, adding to recent gains. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.4 basis points at 1.725 percent.