U.S. Stocks Climb Off Worst Levels But Close Firmly Negative

(RTTNews) - Stocks regained ground over the course of the trading day on Tuesday after falling sharply early in the session but still closed firmly in the red. The major averages closed lower for the third straight session, pulling back further off their record highs.

After hitting its lowest intraday level in a month, the Dow pared its losses but still tumbled 280.23 points or 1 percent to 27,502.81. The Nasdaq fell 47.34 points or 0.6 percent to 8,520.64 and the S&P 500 slid 20.67 points or 0.7 percent to 3,093.20.

The early sell-off on Wall Street came amid renewed trade concerns after President Donald Trump suggested he might prefer to wait until after the 2020 elections to strike a trade deal with China.

Trump told reporters at a NATO summit in London there is no deadline to reach a trade deal, adding, "In some ways, I think it's better to wait until after the election."

"But they want to make a deal now, and we'll see whether or not the deal's going to be right; it's got to be right," Trump said.

Trump claimed a potential trade deal is only dependent on whether he wants to sign it, because the U.S. is "doing very well" and China is "having by far the worst year that they have had in 57 years."

The comments from the president added to rising trade concerns after his administration threatened to impose duties of up to 100 percent on $2.4 billion in French imports, including champagne and handbags.

The threat comes after the administration concluded France's new digital services tax discriminates against U.S. companies such as Google (GOOGL), Apple (AAPL), Facebook (FB), and Amazon (AMZN).

Selling pressure waned as the day progressed, however, with traders looking ahead to the closely watched monthly jobs report due on Friday.

Sector News

Oil service stocks fluctuated before ending the session sharply lower, dragging the Philadelphia Oil Service Index down by 2.5 percent.

The steep drop by oil service stocks came even though the price of crude oil for January delivery recovered from early weakness to close up $0.14 at $56.10 a barrel.

Significant weakness was also visible among transportation stocks, as reflected by the 2.2 percent slump by the Dow Jones Transportation Average. With the drop, the average ended the session at its lowest closing level in over a month.

Steel, banking and semiconductor stocks also saw considerable weakness on the day, while gold stocks bucked the downtrend amid a sharp increase by the price of the precious metal.

With gold for February delivery jumping $15.20 to $1,484.40 an ounce, the NYSE Arca Gold Bugs Index surged up by 3.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index slid by 0.6 percent, while Australia's S&P/ASX 200 Index plunged by 2.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index edged up by 0.2 percent, the French CAC 40 Index slumped by 1 percent and the U.K.'s FTSE 100 Index tumbled by 1.8 percent.

In the bond market, treasuries moved sharply higher after trending lower over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, plummeted 12.7 basis points to 1.709 percent.

Looking Ahead

Any news on the trade front will continue to attract attention on Wednesday, although traders are also likely to keep an eye on reports on private sector employment and service sector activity.