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U.S. Stocks Remain Under Water Following U.S. Housing Data

NEW YORK (MarketWatch) -- U.S. stocks on Tuesday opened lower after Alcoa Inc.'s earnings fell short of forecasts and Advanced Micro Devices Inc. projected revenue below what it had anticipated previously and said it would cut its work force 10%.

Stock indexes added to early losses after the National Association of Realtors reported its index of sales contracts on previously owned homes fell 1.9% in February to 84.6, the lowest since the gauge's inception.

Off more than 50 points ahead of the housing data, the Dow Jones Industrial Average was more recently down 68.70 points at 1,2553.73.

Of the Dow's 30 components, 23 were trading lower in the early going, with aluminum manufacturer Alcoa among the blue chips on the decline. After Monday's close, Alcoa reported a first-quarter profit drop of more than 50%. .

"U.S. equities were tarnished by the first round of first-quarter earnings results," wrote analysts at Action Economics.

The S&P 500 dropped 6.44 points to 1,366.10, while the technology-heavy Nasdaq Composite shed 16.91 points to 2,347.92.

Weighting on the tech sector, chipmaker AMD said late Monday it plans to trim its workforce by 10% .

Shares of AMD were off 5.5%.

Also lower, shares of Apple Inc. dropped 1.1% following a downgrade to underperform from market perform by Morgan Keegan, which noted "mounting evidence of broad-based weakness in consumer technology spending in the U.S. and Europe."

Ahead of Tuesday's open, Washington Mutual Inc. projected a first-quarter loss of $1.1 billion, while entering deals to raise $7 billion.

Speculation that Washington Mutual would draw an investment of $5 billion helped U.S. stocks make modest gains on Monday.

Shares of struggling lender WaMu were off about 6% lately.

In commodities trading, crude-oil futures edged higher, with crude for May delivery gaining 8 cents to $109.17 a barrel on the New York Mercantile Exchange.

Gold futures fell, with the front contract dipping $9.40 to $913.30 an ounce.

Still on deck Tuesday are the release of minutes from the last Federal Reserve rate-setting meeting on March 18, when the benchmark federal funds rate was reduced by three quarters of a percentage point. The minutes are due out at 2 p.m.

"With the Fed in crisis-management mode, what happens next with the already-low funds rate is not important," said Tony Crescenzi, chief bond market strategist at Miller Tabak & Co.

"The only information that would intrigue would be any ideas that the Fed indicates for crisis scenarios," he said.

By Kate Gibson

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