Stocks Turn Lower Amid Interest Rate Concerns - U.S. Commentary

(RTTNews) - Stocks have come under pressure over the course of the trading day on Tuesday after moving modestly higher earlier in the session. The major averages have pulled back into negative territory, adding to the modest losses posted on Monday.

Currently, the major averages are just off their lows for the session. The Dow is down 86.75 points or 0.5 percent at 18,029.29, the Nasdaq is down 9.51 points or 0.2 percent at 5,001.46 and the S&P 500 is down 8.77 points or 0.4 percent at 2,095.65.

The pullback on Wall Street is partly due to renewed concerns about the outlook for interest rates on the heels of some upbeat housing data.

The Commerce Department released a report earlier in the day showing that new home sales surged up by 7.8 percent to an annual rate of 539,000 in February from the revised January rate of 500,000.

The increase came as a surprise to economists, who had expected new home sales to drop to a rate of 462,000 from the 481,000 originally reported for the previous month.

With the unexpected increase, new home sales rose to their highest level since hitting a rate of 593,000 in February of 2008.

Meanwhile, the Labor Department released a separate report before the start of trading showing a modest rebound in consumer prices.

The Labor Department said its consumer price index edged up by 0.2 percent in February after tumbling by 0.7 percent in January. The modest increase by the index matched the consensus estimate.

Core consumer prices, which exclude food and energy prices, also rose by 0.2 percent for the second consecutive month. Economists had expected core prices to inch up by 0.1 percent.

Reflecting the concerns about higher interest rates, utilities stocks have shown a significant move to the downside on the day. The Dow Jones Utilities Average has fallen by 1.2 percent amid notable losses by PG&E Corp. (PCG) and FirstEnergy (FE).

Steel stocks are also seeing considerable weakness, resulting in a 1.1 percent drop by the NYSE Arca Steel Index. The weakness in the sector comes as disappointing Chinese manufacturing data has raised concerns about demand.

Electronic storage, trucking, and telecom stocks have also come under pressure, although most of the major sectors are showing only modest moves.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan's Nikkei 225 Index slipped by 0.2 percent, while Australia's All Ordinaries Index rose by 0.2 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index dipped by 0.3 percent, the French CAC 40 Index and the German DAX Index advanced up by 0.7 percent and 0.9 percent, respectively.

In the bond market, treasuries have moved to the upside, extending a recent upward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down 3.3 basis points at 1.882 percent.