Stocks remain under the truncheon, with concerns about slowing global growth, particularly in China, to the fore.
“Global growth will be lackluster over the next two years as the slowdown in China and other emerging markets continues to weigh on the world economy, Moody's Investors Service said in a report published on Monday.
The debt rating agency forecast that economic growth among the G20 countries will average 2.8% in 201-17, just 0.3 of a percentage point above the 2012-14 growth rate, and below the 3.8% average recorded in the five years before the global financial crisis.
The rating agency's latest forecasts are broadly unchanged from its last quarterly Global Macro Outlook in August.
That news quickly took the wind out of the sails of US stocks, according to Connor Campbell of spread betting firm Spreadex.
“Hot on the heels of the country’s [China’s] inflation slip came a report from the ratings agency that claimed ‘the main risks to the economic outlook are a bigger than expected global fallout from the Chinese slowdown’. Not necessarily a surprising statement, but given the fact they had already had to endure China’s aforementioned crumbling CPI investors were in no mood for another dour dollop of data reaffirming that the main market-bogeyman is just as terrifying as first thought,” Campbell said.
At 3:29 p.m., the S&P 500 (INDEXSP:.INX) rose or 0.1% to 2,080.73, while the Dow Jones Industrials Average (INDEXDJX:.DJI) was up 0.1% at 17,749. While those two benchmarks both rallied after a weak opening, the Nasdaq Composite (INDEXNASDAQ:.IXIC) remains deep in the mire, down 0.2% at 5,082.
Rackspace Hosting (NYSE:RAX) was defying the weaker trend following some eye-catching numbers released after the end of trading on Monday.
The shares were up 14.3% at US$30.96, as it revealed third quarter post-tax profits of US$36.5mln, up from US$25.7mln the year before.
Earnings per share rose to 26 cents from 18 cents a year earlier and were six cents ahead of the consensus forecast.
Fashion firm Gap (NYSE:GPS), in contrast, disappointed with its third quarter earnings update after the bell yesterday.
Net sales for the four weeks to the end of October eased to US$1.20bn from US$1.26bn in the corresponding period of last year. Like-for-like sales were down 3% from a year earlier.
Net sales for the third quarter on a constant currency basis were flat year-on-year.
The shares were off 4.3% at US$26.48, less than had looked likely in pre-market trading, as the stock has been given firm support by broker Jefferies and its punchy US$50 price target.
Financial services company J.G. Wentworth (NYSE:JGW) fell out of bed with a bump after its earnings update yesterday. The shares were 22.7% lower at US$3.13, not helped by Jefferies slashing its price target to US$4.50 from US$6.00.
Shares in Wayfair (NYSE:W) were also under pressure, down 6.3% at US$42.97, despite reduced losses in the third quarter.
The online home-goods retailer’s loss has now narrowed in three consecutive quarters, while revenue in the third quarter grew 77% to US$594mln.
Barrett Business (NASDAQ:BBSI) plunged as its auditor found evidence of an illegal act regarding workers' compensation expense reserve.
Shares of the Vancouver, Washington-based company shed 30% having almost doubled this year to $52.75 at the close of trading on Monday.
The provider of business management solutions reported on Tuesday that the audit committee of its board of directors has received a letter from Barrett Business' independent registered public accounting firm, Moss Adams LLP.
Mallinckrodt PLC (NYSE:MNK) recovered after taking a dive yesterday, after a comment on social media by Citron Research suggesting the pharmaceutical company’s downside to is worse than Valeant Pharmaceuticals Intl Inc (NYSE:VRX).
Mallinckrodt’s shares were up 6.8% at US$61.90, but were still below Friday’s close of US$69.89