(RTTNews) - Stocks are coming off their highs of the day during morning trading on Tuesday after seeing significant early strength. The initial strength came as investors sought out bargains following a sharply lower close on Monday. However, substantially weaker than expected consumer confidence data has dragged the major averages well off their highs.

The Conference Board released its consumer confidence report for October earlier today, saying that its consumer confidence index, which is based on a survey of 5,000 U.S. households, fell to a record low in October.

The report showed that the consumer confidence index fell to 38.0 in October from a revised 61.4 in September. Economists had been expecting a much more modest decrease by the index to a reading of 52.0 from the 59.8 originally reported for the previous month.

With the decrease, which marked the third largest monthly drop in the history of the series, the consumer confidence index fell to its lowest reading on record. The Conference Board began conducting its survey of consumer confidence in 1967.

Meanwhile, traders are keeping an eye on the Federal Reserve’s two-day meeting that started today. The meeting is expected to result in another interest rate cut as an attempt to quell some of the fears surrounding the broader markets.

However, with the Fed’s benchmark interest rate sitting at 1.5 percent as the meeting begins, analysts are wondering how much more benefit the economy will be get from lowering rates.

In corporate news, big name companies Whirlpool (WHR) and Honda (HMC) both released their quarterly reports on Tuesday and Whirlpool revealed a plan to cut employment costs.

Whirlpool announced that it expects to reduce its global workforce by approximately 5,000 positions by the end of 2009. The appliance maker also reported third quarter earnings that fell 7 percent year-over-year on lower global unit volumes and higher material costs.

Honda reported second-quarter earnings that fell significantly from the same quarter last year and reduced its guidance for the full year.

While the major averages have pulled back well off their highs for the session, they are currently holding onto strong gains. The Dow is currently up 189.56 at 8,365.33, the Nasdaq is up 25.32 at 1,531.22 and the S&P 500 is up 16.05 at 864.97.

Sector News

Currently, the vast majority of the major sector indices are seeing gains, although many have pulled back off their highs for the session.

Gold stocks are holding onto notable gains, contributing to a __ percent gain by the Amex Gold Bugs Index. With the gain, the index is moving well off the five-year closing low that it set on Monday. The gains by gold stocks comes despite a decrease by the price of the precious metal.

While most of the components of the Amex Gold Index are seeing gains, a 6.0 percent gain by Eldorado Gold (EGO) and a 7 percent gain by Harmony Gold are leading the advance in the sector.

Other resource stocks are also turning in strong performances as commodity prices rise, with the Amex Oil Index posting a gains 2.2 percent gain. .

Helping to advance the Amex Oil Index is a strong quarterly report from BP plc (BP). The company reported a third-quarter profit attributable to BP shareholders of $8.05 billion, which came in substantially higher than the $4.41 billion seen in the same quarter last year.

Healthcare provider, telecom, defense, and networking stocks are also seeing significant gains on the day.

At the other end of the spectrum, housing and brokerage stocks are posting notable losses as the major averages come off their highs. Currently, the Philadelphia Housing Sector Index is down 3.4 percent, while the Amex Securities Broker/Dealer Index is down 4.4 percent.

Stocks Being Driven By Analyst Comments

Biogen Idec (BIIB) is posting a strong gain after an upgrade to Outperform by Cowen. The stock is currently seeing a gain of 3.9 percent after Cowen analyst Eric Schmidt said he believes “Biogen Idec is an excellent acquisition candidate, and that the company’s value is best assessed via a sum-of-the parts analysis of its assets.”

At the other end of the spectrum, Rigel Pharmaceuticals (RIGL) was downgraded by RBC Capital Markets to Sector Perform from Outperform. The downgrade has taken the stock to a loss of 31.6 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Tuesday, led by Hong Kong’s Hang Seng index, which surged up more than 14 percent. The benchmark Nikkei 225 index closed up 6.4 percent.

The major European markets are also posting notable gains, reversing some recent losses. The German DAX Index remains the best performer of the three major European indices, rising 5.7 percent, while the French CAC 40 Index and the U.K.’s FTSE 100 Index are showing gains of 0.5 and 2.4 percent, respectively.

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Posted in Categories: Economy, Eurozone, Japan, Releases, USA.

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