U.S. stocks traded lower midday Tuesday after a fluctuating morning session as investors were weighing a bunch of mixed economic data and corporate earnings.
The three major indices followed declines in Asian and European stock markets at the opening bell as data showed China's service sector activity slowed to the lowest level in nearly 9 years.
China's service sector activity stagnated as the headline HSBC/ Markit China Services index for July, at 50.0, hit its lowest reading since the series began in November 2005, data company Markit said Tuesday in a statement.
Another report released by Markit showed the final seasonally adjusted Markit U.S. Services Business Activity Index registered 60.8 in July, only a touch below the survey-record high of 61.0 registered in June. But the latest reading indicated a sharp overall expansion of service sector output.
The Institute for Supply Management said that economic activity in the U.S. non-manufacturing sector expanded at the fastest pace since December 2005, with the non-manufacturing index registering 58.7 in July from 56 the prior month.
Although the pair of non-manufacturing surveys showed contrasting changes in momentum between June and July, "they looked strong in both months and point to strength in the service sector early on in 3Q (the third quarter)," said J.P. Morgan economist Daniel Silver in a note Tuesday.
Additionally, new orders for manufactured goods in June advanced 1.1 percent in June, reported the U.S. Commerce Department, surpassing market consensus.
On corporate earnings front, American International Group (AIG) late Monday reported second-quarter earnings and revenues that beat analyst estimates. The insurance group also announced an additional 2-billion-U.S. dollar stock buyback program. AIG shares slipped 1.31 percent to trade at 51.97 dollars apiece at noon.
Coach early Tuesday reported net sales of 1.14 billion dollars for its fourth fiscal quarter, down 7 percent year over year, while adjusted earnings per diluted share fell to 59 cents from 89 cents a year ago, as the luxury handbag maker's North American sales declined. But its results still topped Wall Street's forecast, pushing Coach shares up 4.17 percent midday.
At midday, the Dow Jones Industrial Average lost 71.86 points, or 0.43 percent, to 16,497.42. The S&P 500 dropped 8.96 points, or 0.46 percent, to 1,930.03. The Nasdaq Composite Index was down 14. 85 points, or 0.34 percent, to 4,369.04.
On the previous trading session, U.S. stocks rallied, with the Dow snapping a four-day losing streak, as investors bought a dip after a broad-based selloff last week.