US stocks slip on profit taking

Normal 0 MicrosoftInternetExplorer4 NEW YORK: US stocks fell in early trading on Tuesday, as investors cashed in on the strong gains of the past two days amid renewed doubts about the global economy.

The Dow Jones Industrial Average dropped 57.56 points (0.50 percent) to 11,481.69 in the first half-hour of trading.

The broader S&P 500 was down 6.27 points (0.52 percent) to 1,203.81, while the tech-heavy Nasdaq Composite slumped 14.76 points (0.58 percent) to 2,547.35.

Earlier on Tuesday, stock markets in Frankfurt and Paris tumbled after a European Union survey showed that consumer and business confidence in the eurozone economy fell in August, falling for the sixth consecutive month.

"With continued downgrades of economic growth projections and ongoing political/debt battles in Europe and the US, profit taking by participants expecting more volatility... fits in the realm of reasonable explanations this morning," said Patrick O'Hare, an analyst with Briefing.com.

In the United States, the closely watched S&P/Case-Shiller Home Price Index showed that US housing prices rebounded in the second quarter but still remain at 2003 levels, underscoring the weakness of the vital US housing market.

Bank of America shares tumbled 3.5 percent after a US government agency, the Federal Deposit Insurance Corporation, filed an objection to the bank's $8.5 billion settlement for losses on mortgage-backed securities.

The bank has been struggling to shepherd the settlement through the courts in a bid to move beyond its disastrous involvement with subprime mortgages prior to the 2008 financial crisis.

Boeing shares were up 0.7 percent after the aerospace giant launched a new version of its popular 737 airplane with a revamped and more fuel-efficient engine.

Bond prices rose. The yield on the 10-year Treasury note dropped to 2.20 percent from 2.27 percent late Monday, while that on the 30-year bond fell to 3.55 percent from 3.62 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011