Sellers have challenged the stock market's recent upturn. Their efforts have kept the major equity averages in negative territory.
The dollar has drifted down to an afternoon low, however. Its weakness is largely the result of a bounce by the euro, which is now up 0.5% to $1.422.
EUR/USD trades back above $1.4200 now for fresh highs for the US session at $1.4216. Rate triggered stops above the morning high and $1.4200. Supply at $1.4225 with stops at $1.4230.
Stocks are trimming losses, but they still have a ways to go before they can attempt to claim a gain. The upturn comes as the dollar dips back into negative territory so that it now trails a basket of major foreign currencies by about 0.1%.
The yen dropped the most in almost three weeks versus the dollar after Bank of Japan Governor Masaaki Shirakawa said the economy is in a “very severe” state, fueling bets monetary policy may be eased further.
The Japanese currency weakened against most of its major counterparts.
The pound rose from almost a one-month low versus the dollar as U.K. inflation accelerated to the highest level since 2008, increasing pressure on the Bank of England to raise interest rates.
U.K. consumer prices increased 4.5% last month from a year earlier after a 4% gain in March, the Office for National Statistics said today. The median forecast of economists was a 4.1% rise. Core inflation accelerated to a record. The British central bank has held its official bank rate at 0.5% since March 2009.
Japan’s economy has been in a severe situation since the March 11 earthquake and the central bank is committed to ending deflation, Shirakawa told today. The government hoped for “flexible” action by the bank to support the economy and will also closely watch the currency, according to a statement approved by Prime Minister Naoto Kan’s Cabinet.
Ministers for the first time also floated the idea of talks with bondholders over extending Greece’s repayment schedule. Europe would consider “reprofiling” Greek bond maturities as part of a package including stepped-up sales of state assets and deeper spending cuts, Juncker said.
EUR/CHF printed lows near Chf1.2500 as a few stops were flushed below Chf1.2510 and further stop interest in place below Chf1.2500. Currently cross holds around Chf1.2525.
EUR/USD retreats again, holding around $1.4141 after it failed to recover. Semi-official supply was mentioned ahead of $1.4160 and above, so there is a risk for a test.
Stocks are on the backslide following a failed attempt to turn higher. For the second straight session the Nasdaq pared losses, but ran into resistance upon reaching the neutral line.
Tech stocks are still the primary culprits behind the Nasdaq's recent weakness. Semiconductor issues are among the weakest performing tech holdings; collectively, they are down 1%, as measured by the Philadelphia Semiconductor Index.
"April's slower than trend increase of 0.2% for factory production excluding autos is consistent with the recent declines in the regional manufacturing indexes."
The major equity averages are down with marked losses this morning. Tech continues to be a source of considerable weakness. The sector, which is the largest by market weight, is down 0.8%. Natural resource plays, like energy stocks (-0.6%) and materials stocks (-0.5%), have also been a burden on the broad market in the early going.
Financials, however, are showing strength for the second straight session; they are up 0.4% as a group. The sector's strength comes without help from bank stocks, which are collectively down 0.2%, according to the KBW Bank Index.
U.S. stock futures were under pressure Tuesday after Hewlett-Packard issued a weak outlook and as investors geared up for reports on housing and industrial production.
Hewlett-Packard (HPQ, Fortune 500) reported a 3% increase in sales but warned the current quarter will be hurt by Japanese quake impact and weak PC sales. HP shares fell more than 4% in premarket trade. The company reported ahead of schedule after a memo about its outlook was leaked late Monday.
U.S. stocks ended a choppy session lower Monday as investors remained focused on oil prices and the debt crisis in Europe.
Companies: Dow component Wal-Mart Stores (WMT, Fortune 500) reported quarterly income of $3.4 billion and sales of $103 billion, topping analysts' estimates.
Home Depot (HD, Fortune 500) beat forecasts by a penny, reporting earnings per share of 50 cents. But the home improvement retailer posted sales of $16.8 billion, a 0.2% decrease from the year-earlier period.
Earnings from Dell (DELL, Fortune 500) are due after the closing bell. The company is expected to earn 43 cents per share.
World markets:
USD/JPY Y81.00, Y81.50, Y79.50
EUR/JPY Y113.50, Y117.70
GBP/USD $1.6250
USD/CHF Chf0.8930
AUD/USD $1.0550, $1.0490
USD/NZD $0.7800
AUD/NZD NZ$1.3600
USD/CAD C$0.9800
Apr CPI +1% m/m; +4.5% y/y; core CPI +3.7% y/y
Apr RPI +0.8% m/m; +5.2% y/y; Apr RPIX +5.3% y/y






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