Stocks suffered their biggest decline in three weeks Tuesday as a sharp drop in consumer confidence rattled the market.
The Dow Jones Industrial Average lost about 101 points, or 1 percent, to end at 10,282.41.
Alcoa and American Express led Dow decliners.
Ten of 10 key S&P sectors were lower, led by financials, materials, and energy.
The dollar gained against the eurobut fell against the yen. Oil fell below $79 a barrel, while gold dropped to around $1,104 an ounce.
The CBOE volatility index jumped, finishing above 21.
The Conference Board reported its gauge of consumer confidence tumbled to 46in February from 56.5 in January. Economists had expected a much less severe drop to 54.8. A separate report showed home prices declined in December.
This came after a report out of Germany showed business morale hinted at a contraction for the first quarter and overshadowed some encouraging earnings reports.
Offering little comfort was a mediocre two-year auction: The high yield was 0.895 percent and the bid-to-cover ratio was 3.33.
Stocks had been rising for the past four sesssions, logging two straight weekly gains. Today's drop in confidence and the market prompted speculation that this may be the beginning of a modest correction.
Home Depot led a handful of Dow gainers after the home-improvement chain posted fourth-quarter earnings of 24 cents per share, beating estimatesof 17 cents per shares. Its largest competitor, Lowe's , also topped earnings forecasts.
Macy's returned to profitability in the fourth quarter, as cost-cutting measures helped offset a decline in sales.
Target beat expectations but investors had hoped for a bigger improvementand the stock fell.
Autodesk will report after the closing bell.
Today was the first of two days of Congressional hearings — involving different committees — on Toyota's recall issues. Toyota's top North American executive, Jim Lentz, appeared today, with President/CEO Akio Toyoda testifying on Wednesday. This comes as Toyota now faces a criminal probe in the U.S. over the handling of those recalls.
Congressmen berated the company for "failing its customers," and "misleading Americans," as did Toyota drivers who incurred problems.
"Shame on you, Toyota," said Rhonda Smith, of Sevierville, Tenn., who delivered the most riveting testimony of the day about how her Toyota-made Lexus suddenly zoomed to 100 miles an hour and wouldn't stop for six minutes.
Lentz said: "Put simply, it has taken us too long to come to grips with a rare but serious set of safety issues, despite all of our good faith efforts."
"I will do everything in my power to ensure that such a tragedy never happens again," Toyoda, who testifies tomorrow, said in a statement. "My name is on every car. You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers," he added.
Fed Chairman Ben Bernanke will be heading to Capitol Hill tomorrow for two days of testimony. Investors will be paying close attention for any clarification on the Fed's tightening plan after last week's surprise move to raise the discount rate.
Still to Come:
WEDNESDAY: New-home sales; Bernanke testifies; Toyota hearing; Obama business roundtable; five-year note auction; Earnings from Dollar Tree and Toll Brothers
THURSDAY: Weekly jobless claims; durable-goods orders; Bernanke testifies; Fed's Pinalto, Bullard speak; Apple shareholder meeting; Buffett lunch; health-care summit; seven-year auction; financial-industry compensation hearing; Earnings from Kohl's, Liberty Media and Gap
FRIDAY: 2nd read on Q4 GDP; consumer sentiment; existing-home sales; Fed's Kocherlakota speaks; Madoff hearing; Earnings from Berkshire Hathaway
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