Wall Street was lower in late morning trading on Tuesday as oil prices kept sliding and tepid US data added to global growth worries. Oil prices were down more than 4 percent as a potential economic slowdown weighed on prospects of demand. Shares of oil majors Exxon and Chevron were down about 1 percent as the S&P energy sector led the decliners with a 2.19 percent fall.
Adding to the dour mood, data showed new orders for US factory goods fell in May on weak demand for transportation and defence capital goods. The Commerce Department said new orders for manufactured goods declined 1.0 percent after two straight months of increases. "People are going to be cautious. They are still keeping an eye on the UK and probably don't want to over commit here," said John Callany, chief economic strategist at LPL Financial in Boston.
"There is also some catch up that's happening, because our markets were closed yesterday and people need to readjust with the jobs report right around the corner." At 11:23 am ET (1523 GMT), the Dow Jones industrial average was down 89.99 points, or 0.5 percent, at 17,859.38, the S&P 500 was down 13.31 points, or 0.63 percent, at 2,089.64 and the Nasdaq Composite was down 41.70 points, or 0.86 percent, at 4,820.87.
The S&P 500 recovered from a session low after FBI Director James Comey said no reasonable prosecutor would bring a case against presumptive Democratic presidential nominee Hillary Clinton for her use of a private email server while secretary of state. Seven of the 10 major S&P sectors were lower. The financial sector, which is heavily exposed to UK markets, was down 1.6 percent. J.P. Morgan, Wells Fargo and Citigroup fell between 2-3 percent.
Investors have been seeking safe-haven assets in an uncertain economic environment. US government bond yields were at an all-time low as weak data from China added to the nervousness stemming from Britain's vote to leave the European Union. Data from China showed that the country's services sector activity rose to an 11-month high in June, but a composite measure of activity including manufacturing fell to its lowest in four months.
The Bank of England said the outlook for UK's financial stability post-Brexit was "challenging" and said it would lower the amount of capital that banks were required to hold in reserve in order to allow them to keep lending. The yen, a traditional safe haven, jumped to a two-week high against the dollar. While traders do not expect the US Federal Reserve to raise interest rates this year, they will keenly watch policymakers' comments on what the Fed's next step would be.
New York Fed President William Dudley is scheduled to participate in a discussion in Binghamton, New York at 2:30 pm ET. Tesla's shares fell 3.2 percent to $209.55 after the electric car maker missed vehicle deliveries target for the second consecutive quarter. Declining issues outnumbered advancing ones on the NYSE by 2,275 to 660. On the Nasdaq, 1,977 issues fell and 684 advanced. The S&P 500 index showed 57 new 52-week highs and one new lows, while the Nasdaq recorded 50 new highs and 19 new lows.
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