U.S. stocks traded lower on Tuesday morning, as investors cash in on previous session's big gain and wait for the bank stress test result, Xinhua reported.
On Monday stocks were boosted by the upbeat data in pending home sales and construction spending. All major indexes gained more than 2 percent and the S&P 500 rose back above 900 points.
Stocks opened flat and traded in negative area on Tuesday morning as investors took profit in Monday's jump. Meanwhile, the market sentiment grew more cautious as economic reports weighing.
Federal Reserve Chairman Ben Bernanke told the Joint Economic Committee of Congress that the economy should see bottom and start growing again later this year. But he also warned that even after a recovery gets under way, economic activity is likely to be subpar, which means unemployment is still expected to rise.
The Institute for Supply Management's April report on the services sector showed a seventh straight month of contraction, but the pace of decline slowed more than expected.
Investors anxiously await the result of the bank stress test. The Wall Street Journal reported that about 10 out of the 19 banks undergoing the tests will be required to raise more capital.
In earnings, Kraft Foods Inc. said its first-quarter profit rose by 10 percent despite a drop in sales. CVS Caremark Corp.'s profit fell slightly on charges and higher costs, outweighing a 12 percent jump in the drugstore operator's revenue from higher pharmacy sales.
Dow Jones industrial average retreated 19.75, or 0.23 percent, to 8,406.99. Broader indexes also moved lower. Standard & Poor's 500 index fell 5.50, or 0.61 percent, to 901.74, and Nasdaq lost 19.45, or 1.10 percent, to 1,744.11.
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