Banks Take Europe Down; Gold Hits New Record

NEW YORK (TheStreet) -- European shares retreated on Tuesday, with the vast majority of declines coming from the banking sector.

Earlier in the day, Asian stock markets reached the highest level in 13 months, while S&P 500 futures were trading close to the high of the current year in the 1070 area.

Finland's OMX Helsinki index was the only major market that was trading above the break-even line in Europe, with all the other indexes are in the red.

S&P 500 futures saw a very small range during the overnight session, something that has become a trend lately. Currently, the S&P futures were trading in the 1070 area, very close to the high of the current year.

Ahead, investors await earnings results from Intel(INTC Quote) and Johnson & Johnson (JNJ Quote), which will have a crucial influence in Tuesday's price action.

The vast majority of declines in Europe came from the financial sector, with banks shedding 1% from the European markets. This happened after Meredith Whitney cut Goldman Sachs (GS Quote) to "neutral," while Lloyds (LYG Quote) continued its losing streak as the market speculates the bank wants to exit the U.K. government's asset protection scheme. This would cost the bank an impressive $3.2 billion, which, according to some analysts, will add further strain to the bank's balance sheet. More banks are soon expected to follow in Lloyd's footsteps, and exit the government's rescue plans.

The only sector that managed to post substantial gains in Tuesday trade was media.

During the European session, the German ZEW Economic Sentiment report came in worse than expected. Moreover, the report showed that October's numbers were actually lower than the ones released in September, being the first time monthly drop since July. Ahead, the U.S. session is clear of any red flag reports.

Crude oil for November delivery was recently trading at $73.98 a barrel, higher by 71 cents. Crude oil managed to reach the highest value since late August, even though the dollar index didn't move anywhere importantly over the last few trading sessions.