IBM Pulls Dow Deep Into the Red

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IBM led the Dow deep into negative territory on Tuesday as the blue-chip average receded further from record highs.

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The Dow Jones Industrial Average fell 93.4 points, or 0.6%, to 15519, the S&P 500 dipped 9.8 points, or 0.57%, to 1697 and the Nasdaq Composite slumped 27.2 points, or 0.74%, to 3666.

IBM (IBM) shares were under heavy pressure on the back of a downgrade from Credit Suisse. The investment bank cut the computing giant to "underperform" from "neutral." The move in Big Blue's shares shaved more than 30 points off of the Dow's performance.  

Sony (SNE) turned down a proposal from Dan Loeb's Third Point to spin off its entertainment business. The electronics giant came under heavy selling pressure on the move. Meanwhile, Jeff Bezos will buy Washington Post's (WPO) publishing business, including its namesake paper, for $250 million. 

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BATS Global Markets ran into a glitch that forced Nasdaq Stock Market to divert orders away from its main exchange for about an hour in afternoon trading. 

The Commerce Department said the U.S. trade deficit fell to $34.22 billion in June from $44.1 billion in May, much smaller than the $43.5 billion deficit economists expected. Imports slid 2.5%, while exports jumped 2.2% to a record high.

While the data are a lagging indicator, they will figure directly into second-quarter gross domestic product readings. 

Chicago Federal Reserve President Charles Evans said the central bank is likely to pare back its vast easing program later this year. However, Evans failed to provide more specifics on exactly when. 

Europe is in recovery mode. Or at least that's what the latest round of data show. Germany and the UK both saw gauges of industrial output jump past expectations in June. Meanwhile, struggling Italy's troubled economy contracted less than economists expected in the second quarter. 

The continent has struggled as the eurozone's debt crisis has hit internal demand. Meanwhile, external demand has taken a hit as much of the developing world only slowly recovers. 

Elsewhere, U.S. oil rose 42 cents, or 0.39%, to $106.97 a barrel. Wholesale New York Harbor gasoline gained 0.61% to $2.969 a gallon. Gold slumped $13.80, or 1.1%, to $1,289 a troy ounce. 

Foreign Markets

The Euro Stoxx 50 rose 0.09% to 2812, the English FTSE 100 dipped 0.11% to 6612 and the German DAX slipped 0.02% to 8369. 

In Asia, the Japanese Nikkei 225 rallied 1% to 14401 and the Chinese Hang Seng sold off by 1.3% to 21924.

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