Updated from 4:20 p.m. EDT
Stocks in New York ended moderately lower Tuesday as the major equity averages took a step back after the big rally that started the week.
Dow Jones Industrial Average
gave up 115.49 points, or 1.5%, to 7660.37, and the
shed 16.56 points, or 2%, to 806.36. The
fell 38.94 points, or 2.4%, to 1518.63. The Dow and the S&P momentarily ticked into positive territory before dropping again in the afternoon.
JP Morgan Chase
Bank of America
were the worst performers on the Dow, falling 8.6% and 6.7%, respectively. Financials, which led the major indices 7% higher in the previous session as the market applauded the U.S. government's public and private investment plan, were generally weaker.
"Now the questions are what can we make of this and where do we go from here? We need more information to see how these things pan out," says David Ader, bond strategist with RBS Greenwich Capital. "It's not like this is a rejection. We trade information, new information, and on a day like today there simply isn't anything out there."
Had the session been higher, it would have been an anomaly, writes Vince Farrell, chief investment officer of Soleil Securities and a contributor to
. Farrell credits Laszlo Birinyi for pointing out that there have been five other days since 1990 when the market closed up 6%. Only one of those times has it risen the next day.
"It would be fine with me if this were to be the second time we had an up day after such a strong advance, but don't count on it, and don't be disappointed by a down day," wrote Farrell.
One critic of the Treasury's plan to secure the future of the banks emerged on Tuesday. Nobel Prize-winning economist Joseph Stiglitz said he feels Washington is effectively using the taxpayer to guarantee against downside risk on the value of bad assets held by banks, while luring private investors with the upside, according to a
report. Stiglitz said the plan was "badly flawed" and "amounts to robbery of the American people".
Governments globally have spent hundreds of billions of dollars trying to clean up and restore working order to financial institutions, and glimmers of hope are emerging.
became one of the
to say that it had a strong start to the year. The bank said it is positioned to better weather negative market trends and "to prosper when markets recover."
also said that it is capable of withstanding the tough conditions and has "made a good start to 2009."
Neither of those stocks had gains for the day, however. Credit Suisse shares gave up 9.7% to $30.70, and Deutsche Bank ticked down 3.8% to $42.10.
The announcements follow similar outlooks from
and JP Morgan Chase, which both said earlier in the quarter that they are thus far profitable in 2009.
of its minority stake in Industrial & Commercial Bank of China to help pay off $10 billion in federal bailout funds, according to a report in
The Wall Street Journal
. Goldman shares were off by 1.1% at $110.65.
bonus saga continued Tuesday as the
Chairman Ben Bernanke and Treasury Secretary Tim Geithner both testified at a congressional hearing on the matter.
New York Attorney General Andrew Cuomo's office said Monday that 15 of the top 20 bonus recipients at AIG have agreed to
return their bonuses
, which amounted to about $50 million of the $165 million awarded earlier this month.
AIG shares were down 4.7% at $1.41.
Elsewhere, a few technology names quietly gained
good graces. Deutsche Bank initiated coverage on
with a buy rating, Argus upgraded
to a buy, and Thomas Weisel lifted
to overweight from market weight.
Marvell Technology fell 1% to $9.18, Texas Instruments gave up 2.3% to $12.45, and Microchip Technology edged down 1.1% to $21.02.
Longer-dated Treasuries were mixed. The 10-year note was down 14/32 yield 2.7%, while the 30-year was higher by 28/32, yielding 3.6%.
Checking in on commodities, oil rose 18 cents to settle at $53.98 a barrel, and gold fell $28.70 to $923.80 an ounce. The dollar was recently slightly weaker against the yen, and stronger vs. the euro and pound.
Stocks in Europe were varied, with the FTSE 100 down 1.1% and the Dax up 0.3%. In Asia, Hong Kong's Hang Seng and Tokyo's Nikkei gained more than 3% apiece.