U.S. Markets Finish Lower Despite Late Rally

New York, NY (AHN) - U.S. markets finished Tuesday lower but did pare some losses in a late afternoon rally sparked by news of a renegotiation plan by the mortgage industry to help thousands of homeowners.

The mortgage modification plan targets loans that represent an individual's primary residence who are in delinquency. The plan is to reshape terms so the loan payment represents no more than 38 percent of monthly income.

The Dow Jones Industrial average fell 177 points or 2 percent. 29 of 30 Dow components finished Tuesday with a loss. Pfizer Inc., up 1 percent was the lone gainer.

The S&P 500 fell 20 points or 2.2 percent. Nine of 10 major economic sectors finished the session lower.

The materials sector was the largest decliner, down 4.2 percent. News from Alcoa weighed on the sector after the aluminum giant said it will cut production by 8 percent. Utility stocks were the one positive, with the sector posted a 0.2 percent gain.

Tech was weak with the Nasdaq Composite falling 35 points or 2.2 percent. Shares of Google, down 2.3 percent added to declines. The stock pulled back after Goldman Sachs said it reduced earnings estimates for the company in 2009 and 2010.

Crude oil continued its fall, down $3.62 to settle at $58.79 a barrel. The commodity is now down 40 percent for the year after hitting all-time highs in July.

Corporate news was rather bleak; TJ Maxx reported disappointing quarterly earnings along with KKR Financial. Tyco International posted a better than expected quarterly profit but lowered guidance for 2009.

Earlier in the day Citigroup announced it is implementing a mortgage renegotiation plan to help prevent foreclosures on 500,000 homes.

Wednesday's session will see earnings reports from Crocs Inc., Macy's Inc., SINA Corp, and Thomson Reuters.