Wall Street dives in choppy trade

NEW YORK: US stocks stumbled for the second straight day Tuesday amid falling commodity prices and as investors braced for President Barack Obama’s administration to unveil proposed financial system reforms.

The Dow Jones Industrial Average dropped 107.46 points (1.25 per cent) to finish at 8,504.67. The blue-chip Dow has posted triple-digit losses two days in a row after narrowly entering positive territory for 2009 on Friday.

The tech-heavy Nasdaq fell 20.20 points (1.11 per cent) to 1,796.18 and the broad-market Standard & Poor’s 500 index retreated 11.75 points (1.27 per cent) to close at 911.97. Stocks struggled to hold on to modest gains in morning trade then spent the rest of the session in the red. “Losses were broad-based for the second straight session.

Trading volume was also light for the second straight session, suggesting a lack of conviction behind the recent moves,” Briefing.com analysts said in a client note. Analysts said the market was on edge ahead of the Obama administration’s financial regulatory reform plans, set to be announced Wednesday and aimed at averting a reoccurrence of the financial crisis that has mired the economy in recession since December 2007.

“The uncertainty surrounding tomorrow’s release of the administration’s specific financial-industry reform proposals will likely keep buyers hesitant,” said Scott Marcouiller of Wells Fargo Advisors.

Investors sifted a mixed bag of economic data that brought some positive news on the embattled housing sector and wholesale inflation, but deepened the cloud over the industrial sector. “Tempering the positive sentiment from these reports was a larger-than-forecasted drop in industrial production,” Charles Schwab & Co, analysts said in a client note. “Materials was the weakest sector of the market for the second day in a row on the back of this news.” -- AFP