Investors sent stocks falling as they wait for signals about where the economy is headed.
Investors sent stocks falling as they wait for signals about where the economy is headed.
There was little news to influence the market Tuesday, and with growing unease about when the economy will show real growth, the best course for some was to sell. Volume was extremely low, however, suggesting little conviction behind the selling.
Investors were looking to this week's G8 summit, which starts Wednesday in Italy, to see if world leaders there make any statements about the state of the economy or movements in the U.S. dollar.
They're also awaiting the start of second-quarter earnings reports to see what clues companies can give about the economy. Many fear the market might have been too optimistic in March and April about how soon the economy will recover from a recession that started in late 2007.
"Our view is that the economy is still in a precarious state," said Ben Halliburton, chief investment officer of Tradition Capital Management in Summit, N.J. "The weak consumer, driven by very high unemployment, destroyed wealth and unavailable credit is going to continue to be a major drag on the U.S. economy."
Falling oil prices, meanwhile, sent energy and industrial stocks sharply lower, which weighed on the overall market. Crude tumbled below $63 a barrel Tuesday, down from an eight-month high hit last week, on concerns that a weak economy will dampen demand for energy.
In late morning trading, the Dow Jones industrials fell 76.02, or 0.9 percent, to 8,248.85. The Standard & Poor's 500 index fell 7.30, or 0.8 percent, to 891.42 and the Nasdaq composite index lost 16.79, or 0.9 percent, to 1,770.61.
Declining issues outnumbered advancers by about two to one on the New York Stock Exchange, where volume came to a relatively low 235.3 million shares compared with 327.9 million shares at the same time a day earlier.
Disappointing economic news over the last few weeks, culminating in last Thursday's worse-than-expected jobs report for June, has altered investors' belief that the economy would rebound significantly.
Stocks finished mixed on Monday after all the major indexes posted losses last week. Both the Dow and the S&P 500 have shed at least 5 percent since mid-June.
Investors are now looking to second-quarter earnings reports for some sense of whether companies have already seen the worst of the recession.
"It doesn't have to be spectacular news," said Carl Beck, a partner at Harris Financial Group. "But number one we'd like a little more clarity about what they expect to see the rest of the year."
Results start to trickle in with casual dining chain Ruby Tuesday Inc. reporting after the close of trading Tuesday. Wall Street expects a profit of 19 cents per share, on average, according to Thomson Reuters.
Aluminum maker and Dow component Alcoa Inc. reports on Wednesday. Wall Street analysts expect Alcoa to post a second-quarter loss of 37 cents per share. In the same period a year earlier, Alcoa earned 66 cents per share on revenue of $7.6 billion.
Early Tuesday, Ikea said it will cut more jobs than previously announced as the financial crisis continues to weigh on demand for its furniture. The Swedish furniture retailer did not say exactly how many workers would be affected. In the past 10 months, Ikea has already slashed 5,000 jobs globally after sales dropped 7 percent below budget.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 3.50 percent from 3.51 percent late Monday. The yield on the three-month T-bill rose to 0.18 percent from 0.17 percent late Monday.
The dollar mostly gained against other major currencies. Gold prices rose.
Crude prices fell 94 cents to $63.11 a barrel on the New York Mercantile Exchange.
Overseas Tuesday, Japan's Nikkei stock average fell 0.3 percent. In afternoon trading, Britain's FTSE 100 was up 0.8 percent, Germany's DAX index was up 0.4 percent, and France's CAC-40 was up 0.3 percent.
In other trading, the Russell 2000 index of smaller companies dipped 3.10, or 0.6 percent, to 490.93.
