Updated from 6:43 a.m. EDT
Gloom spread on Wall Street early Tuesday as plunging commodity prices and horrific overseas sessions left buyers paralyzed.
Index futures recently showed the
trading 6 points below fair value, while the Nasdaq 100 was set for a 4-point decline. The 10-year Treasury bond continued to find a bid in the absence of viable alternatives, rising 5/32 to yield 4.96%, while the dollar was unchanged against the yen and euro.
Since its most recent peak on April 7, the
has lost 284 points, or 12%. On the
Dow Jones Industrial Average
, the loss from a recent high on May 10 is 916 points, or 7.8%. The S&P 500 has fallen 91 points, or 6.9%, since its peak touched May 9.
Monday saw the Nasdaq fall for its seventh consecutive session, losing 44 points, or 2.1%, to bring its decline for 2006 to more than 5%. The Dow reversed early gains and ended off 99 points, leaving it up 0.7% for the year, while the S&P 500 fell 16 points to 1236, about a point above its worst level of 2006.
At 8:30 a.m. EDT, the Labor Department is expected to say that its main gauge of wholesale inflation, the producer price index, rose by 0.4% in May after posting a 0.9% rise in April. Excluding food and energy, the closely watched core PPI is expected to rise 0.2%, twice the rate recorded in April.
Also due Tuesday is the Commerce Department's report on retail sales for May, which is expected to be flat.
The PPI and its retail counterpart, the consumer price index, due Wednesday, have loomed ominously over stocks and commodities since members of Ben Bernanke's
started making hawkish comments in a series of speeches last week. Bernanke steered clear of policy in an address last night in Washington.
One theory holds that the Fed's anti-inflationary rhetoric has been designed to chase speculators out of metals and other assets that saw steep price appreciation through the first five months of 2006. If so, it's working, with gold down 4.4% last week, silver down 7.3% and copper plunging 9%.
In trading Tuesday, gold lost another $16.90 to $594.40 an ounce, while silver dipped 55 cents to $10.52 an ounce and copper lost 7.9 cents to $3.15 a pound. In oil markets, front-month crude was off 66 cents to $69.66 a barrel as Tropical Storm Alberto looked increasingly unlikely to threaten Gulf Coast energy infrastructure.
Overseas markets were uniformly lower, with London's FTSE 100 recently down 2% at 5510 and Germany's Xetra DAX losing 1.8% to 5300. In Asia, Japan's Nikkei tanked 4.1% overnight to 14,219, while Hong Kong's Hang Seng skidded 2.5% t5o 15,234.
Weakness in brokerage shares featured prominently in Monday's selloff, with
( LEH) losing 5.5% after executives on a post-earnings conference call spoke cautiously about market conditions in May and June.
continues the brokerage earnings parade Tuesday, with analysts expecting earnings of $4.28 a share on revenue of $8.47 billion in the March-through-May period.
also reports Tuesday.
In other corporate news,
said earnings in its June fiscal year should be toward the upper end of its previous guidance range of $3.30 to $3.55 a share. Growth should be 12% to 15% in 2007, Cardinal said.
says problems in is electromechanical operations will leave core earnings in its third quarter below previous forecasts. The company still sees revenue in its previously offered range of $2.5 billion to $2.6 billion.
agreed to buy
( MVK) for about $2.4 billion, uniting two suppliers to the energy industry.
Three networking companies were the subject of new research Tuesday by Piper Jaffray. The brokerage began
( FDRY) and
with outperforms and
with a market perform rating.