By Rodrigo Campos
NEW YORK (Reuters) - U.S. stocks were down in morning trading on Tuesday, pressured by a second straight day of weak data out of Germany, the euro zone's largest economy, but indexes bounced off of session lows.
German industrial output for August slid 4 percent, the biggest fall in 5-1/2 years, a day after a report showed industrial orders had their biggest monthly drop since 2009.
A vacuum of market catalysts will only be filled when earnings start in earnest next week according to Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
"There's not a lot to trade on until earnings. That leaves geopolitics in charge," he said, linking the weak German data to the conflict in eastern Ukraine and economic sanctions against Russia, a major business partner of Berlin.
"There is also concern foreign currency moves are going to impact earnings negatively," he said.
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The U.S. dollar strengthened 0.3 percent against the euro on Tuesday, trading near two year highs, with the euro also weighed by the German data.
The Dow Jones industrial average was falling 86.75 points, or 0.51 percent, at 16,905.16, the S&P 500 was losing 8.27 points, or 0.42 percent, at 1,956.55 and the Nasdaq Composite was dropping 20.11 points, or 0.45 percent, at 4,434.69.
The S&P had hit a session low almost 10 points lower, at 1,947.41.
The Russell 2000 index of small-cap companies briefly reentered correction territory in early trading after scaling out of a more than 10 percent retracement last week. It was recently down 9.8 percent from its record closing high set last March.
The largest percentage gainer on the New York Stock Exchange was IFM Investment Ltd, franchiser of Century 21 in China, rising 46.42 percent. The largest percentage decliner was Christopher & Banks, down 28.02 percent after the women's apparel retailer cut its third-quarter revenue forecast.
Among the top percentage gainers on the Nasdaq was RXi Pharmaceuticals, rising 19.05 percent, while the largest percentage decliner was Innovative Solutions and Support, down 47.14 percent.
Among the most active stocks on the NYSE were Petrobras, up 3.61 percent to $16.37; Bank of America, down 1.04 percent to $17.11; and Vale, up 1.59 percent to $11.49.
On the Nasdaq, GT Advanced Technology, up 47.5 percent to $1.18 and Apple, up 0.2 percent to $99.78 were among the most actively traded. GT rallied but after a 92.8 percent plunge to 80 cents on Monday. On Friday, the stock had closed at $11.05.
Sodastream tumbled 20.7 percent to $21.86 after it estimated third-quarter revenue below analysts' expectations.
Declining issues were outnumbering advancing ones on the NYSE by 2,030 to 795, for a 2.55-to-1 ratio on the downside; on the Nasdaq, 1,849 issues were falling and 633 advancing for a 2.92-to-1 ratio favoring decliners.
The benchmark S&P 500 index was posting 2 new 52-week highs and 7 new lows; the Nasdaq Composite was recording 8 new highs and 116 new lows.
(Reporting by Rodrigo Campos; Editing by Nick Zieminski)