11:30AM Wall Street fell in depressive mood. All sectors traded in the red.
U.S. market averages suffered considerable weakness on Tuesday morning, with Dow Jones falling as low as 120 points. The blue-chip index was weighed by steep declines in shares of Alcoa (AA: chart), down 3%, Caterpillar (CAT: chart), down 2.4%, Dupont (DD: chart), down 2%, and General Motors (GM: chart), falling 3%. Another Dow component, Wal-Mart (WMT: chart) fell 1.4% after it agreed to acquire 35% of Trust-Mart, a Taiwanese-owned operator of hypermarkets in China. On the Nasdaq, Internet company Baidu.com Inc. (BIDU: chart) dropped 4%, Shanda Interactive Entertainment Ltd. (SNDA: chart), slipped 3.8%, and Netease.com Inc. (NTES: chart) fell 3.1%. Apple (APPL: chart) also helped push the tech-heavy average lower with a decline of 2.2% after announcing a delay in the launch of Apple TV. Xerox Corp. (XRX: chart) also weighed, falling 1.3% on lowered earnings outlook.

Gold, financials, and real-estate investment trusts led decliners and only individual stocks traded higher. Brocade Communications (BRCD: chart) rose 5% after posting earnings above expectations. Better-than-expected existing homes sales and a rise in consumer confidence failed to offset the negative sentiment generated by a steeper-than-expected drop in durable goods orders in January, but helped limit losses. In late morning trading, the Dow Jones industrial average dropped 142.28, or 1.13%, to 12,489.98. The Standard & Poor's 500 index was down 17.36, or 1.20%, at 1,432.01, and the Nasdaq composite index was down 42.41, or 1.69%, at 2,462.11.

Existing home sales rose more than expected.
Tuesday morning, the National Association of Realtors released its report on existing home sales in the month of January. The report showed that existing home sales rose much more than economists had expected. The report showed that existing home sales rose 3.0 percent to a 6.46 million unit rate in January from a revised 6.27 million unit rate in December. Economists had expected sales to rise to a 6.24 million unit rate compared to the 6.22 million unit rate originally reported for the previous month. NAR also said that total housing inventory levels rose 2.9 percent to 3.55 million existing homes available for sale at the end of January. This represents a 6.6-month supply at the current sales pace, unchanged from the revised December level. The report also showed that the national median existing-home price for all housing types fell to $210,600 in January. With the decrease, the median price is down 3.1 percent year-over-year.


9:45AM U.S. stocks opened deeply in the red. The Dow tumbled 130 points
Wall Street opened deeply in the red on Tuesday, joining a global stock decline amid concerns of slowing economies in China and the U.S. A 10% drop in Chinese stocks, a warning that the U.S. economy may be headed for a recession, and weak data on durable goods orders exacerbated concerns about the economy. The Dow Industrial average dropped about 130 points in early trading. Blue-chip company Wal-Mart (WMT: chart) contributed to the decline, falling 0.9% after it agreed to buy 35% of Trust-Mart, a Taiwanese-owned operator of hypermarkets in China. The tech sector posted weakness, with Apple (APPL: chart) down 2.4% after announcing a delay in the launch of Apple TV. Xerox Corp. (XRX: chart) lost 2.2% after the company lowered its earnings outlook.

Brokerage stocks showed significant weakness, with Lehman Brothers (LEH: chart) turning in one of the sector''s worst performances, down 4.3%. Jefferies (JEF: chart), E*Trade (ETFC: chart), and Bear Stearns (BSC: chart) all slipped more that 3%. Considerable weakness was also visible in the wireless and disk drive sectors. Housing stocks also declined, despite better-than-expected existing home sales data.

Among stocks driven by analyst comments, shares of Marvel Entertainment (MVL: chart) slipped 4% on brokerage downgrade, due to concerns about the stock''s valuation. Shares of NYSE Group (NYX: chart) fell 3% after J.P. Morgan downgraded its rating on the operator of the New York Stock Exchange to underweight from neutral. Bed Bath & Beyond (BBBY: chart) slipped 2.4% after UBS downgraded its rating on the home furnishings retailer, citing valuation. In the first hour of trading, the Dow Jones industrial average dropped 122.57, or 0.97%, to 12,509.69. The Standard & Poor''s 500 index was down 16.87, or 1.16%, to 1,431.41, and the Nasdaq composite index was down 46.07, or 1.84%, to 2,458.45. Bond prices rose as investors bought into the safe-haven Treasury market, with the yield on the benchmark 10-year Treasury note dropping to 4.60% from 4.63% late Monday.

Consumer confidence increased in February.
The Conference Board released its report on consumer confidence in the month of February on Tuesday, showing that its consumer confidence index increased unexpectedly and rose to its highest level in five years. The report showed that the consumer confidence index rose to 112.5 in February from a revised 110.2 in January. Economists had expected the index to fall to 109.0 compared to the 110.3 originally reported for the previous month. With the increase, the consumer confidence index rose to its best level since April of 2001, when it was at 114.0. The Conference Board said that the present situation index rose to 139.0 in February from 133.9 in January, as those claiming conditions are “good” increased to 29.4 percent while those saying conditions are “bad” fell to 14.3 percent. At the same time, the expectations index edged up to 94.8 in February from 94.4 in January, as those expecting business conditions to improve rose to 16.7 percent. The outlook for the labor market was also relatively more upbeat.


9:30AM London is lower Tuesday, following weak global markets.
The UK market was lower on Tuesday. By mid afternoon the FSTE 100 was 142 points, or 2.2%, lower at 6,292.2.

Advancers

With the crude price gaining further to top $62 a barrel, Royal Dutch Shell was one of only a handful of FTSE 100 advancers. The oil company was up 0.3%, while Reuters was the biggest advancer, up 1.4%, ahead of the information group figures on Thursday.

Engineer GKN was up 8.4% after an upbeat trading statement alongside its final results. Broker Cazenove provided a further boost, upgrading the shares to outperform from in line. Chrome and chemical company Elementis was also higher 4.3% after it posted a 159% rise in full year profit and said 2007 has started on a positive note, with further progress expected this year.

Decliners

As Chinese market tumbled today, mining stocks bore the brunt of the sell-off as gains in the sector have largely been powered by Chinese demand. Xstrata lost 5.3%, Vedanta Resources eased 4%, BHP Billiton dropped 4% and Lonmin fell 3.8%. Kazakhmys dropped 5.8%. Confidence in the sector was further eroded by concerns over a potential windfall tax in South

Asia-focused bank Standard Chartered shed 2.7% despite beating forecasts with a 19% increase in full-year profits. Car rental group Avis Europe slumped 17.5% after it announced annual pre-tax profit almost halved and expects market conditions to remain tough.


9:00 AM Market futures steeply dropped on 10% in the Chinese equity market and weak durable goods orders.
U.S stock market futures sharply dropped Tuesday, depressed by a 10% plunge in the Chinese equity market, followed by steep European and Asian losses. Shanghai''s Composite Index hit a ten-year low amid profit-taking sparked by concerns that the government may impose new measures to cool speculative trading. Weaker-than-expected durable goods data in the U.S built on the negative sentiment. Orders of new durable goods dropped 7.8% in January, while economists were expecting a decline of 5.5%, on average. Data on home sales, due out today, is expected to provide some indications on the economy.

Among pre-market highlights, Xerox Corp. (XRX: chart) lowered its Q1 earnings outlook due to restructuring charges. The company said it expects to earn 18 cents to 20 cents in the quarter, down from an earlier forecast of 21 cents to 23 cents. Shares fell 0.8% in pre-open trading. CBS Corp. (CBS: chart) said it swung to Q4 profit of 43 cents a share, from a year-ago loss of $12 a share. Adjusted earnings from continuing operations rose to 60 cents a share, from 42 cents a share, above estimates of 47 cents. Company''s stock rose 2.3% in the pre-open. Sirius Satellite Radio (SIRI: chart) said its Q4 loss narrowed to 17 cents a share from 23 cents a share on 82% subscription growth. The quarterly results beat estimates but the stock lost 1.3% in pre-market trading.

A number of companies were affected by analyst comments, including NYSE Group (NYX: chart) which dropped 3.9% after it was cut to underweight from neutral at J.P. Morgan. Dow Chemical (DOW: chart) was cut by Lehman Bros to underweight from equal weight, citing valuation. S&P 500 futures shed 11.00 points to 1,441.60 and Nasdaq 100 futures dropped 26.25 points to 1,811.50. Dow industrials futures declined 84 points to 12,570.