Stocks Move Lower on Wall Street as Commodities Prices Fall

NEW YORK (AP) -
Trader Michael Milano works on the floor of the New York Stock Exchange on Tuesday. (AP Photo/Richard Drew)
Trader Michael Milano works on the floor of the New York Stock Exchange on Tuesday. (AP Photo/Richard Drew)

Stocks moved lower Tuesday, potentially ending three days of gains, as commodity prices retreated. Crude oil sank more than 4 percent. Investors remained worried about China as the country cut the value of its currency against the dollar yet again. Investors were discouraged by a report showing that consumer confidence fell to its lowest level in seven months.

KEEPING SCORE: The Dow Jones industrial average fell 192 points, or 1.2 percent, to 16,428 as of 1:50 p.m. Eastern. The Standard & Poor’s 500 index lost 22 points, or 1.1 percent, to 1,924 and the Nasdaq composite fell 55 points, or 1.2 percent, to 4,516.

ENERGY FORECAST: Oil prices moved lower after the International Energy Agency said on Monday it does not expect oil prices to recover significantly until 2017, but sees slower growth in global supplies. Crude oil fell $1.57 to $31.82 a barrel while Brent crude, which is used to price oils internationally, fell $1.47 to $33.22 a barrel in London.

TAKING A PAUSE: It is not uncommon to see stocks give up some of their gains after a strong multi-day rally, but traders say the mood is still cautious. They note that trading volume has been far lighter on days the market has risen and heavier on days it has fallen. That suggests there is more interest among investors in getting out of stocks than there is in getting into them.

“We aren’t seeing the buying interest that you would usually see in a major upward swing in the markets,” said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management. “Although we have come off the bottom, it’s still quite volatile out there.”

CHINA WORRIES: Investors were watching developments out of China, where the People’s Bank of China announced it had cut its daily rate between the yuan and the dollar more than expected. The weakening yuan was a major cause of market turmoil in August 2015 as investors worried that it signaled a slowdown in China’s economy.

LACKING CONFIDENCE: A report from the Conference Board showed U.S. consumer confidence fell to 92.2 in February, down sharply from a reading of 97.8 in January and the lowest level since July. Consumers expressed worries about deteriorating business conditions and turbulence in the financial markets for their drop in confidence.

OUT OF SHAPE: Fitbit, maker of wearable fitness trackers, fell $3.17, or 19 percent, to $13.35 after the company issued a weak forecast for 2016.

MERGER WATCH: Dow member United Technologies was down $1.64, or 2 percent, to $90.74 after the company rejected a merger offer from Honeywell.

BONDS, CURRENCIES: U.S. government bond prices rose. The yield on the 10-year Treasury note edged down to 1.73 percent from 1.75 percent a day earlier. The dollar fell to 112.06 yen from 112.83 yen while the euro weakened to $1.1019 from $1.1026.

METALS: Precious and industrial metals futures ended mixed. Gold rose $12.50 to $1,222.60 an ounce, silver rose six cents to $15.24 an ounce and copper slipped a penny to $2.11 a pound.