Stocks retreated Tuesday, led by consumer discretionary and materials, amid disappointment in the latest round of earnings and economic reports.
But stocks ended off their earlier lows amid gains in health care and energy after strong earnings results from Pfizer.
The Dow Jones Industrial Average fell 38 points, or 0.4 percent, to close at 10,636.38, led by Procter & Gamble.
The S&P 500and Nasdaqeach finished down about half a percent. The CBOE volatility index, widely considered the best gauge of fear in the market, was at nearly 23 at the closing bell.
Analysts said the market was due for a pullback after Monday's 2-percent gainthat followed a nearly 7-percent jump in July — the best month in a year.
“The market is still a bit schizophrenic," said Liz Ann Sonders, chief investment strategist at Charles Schwab, adding that while the latest economic data haven't been “fantastic,” they have been sufficient enough to temporarily set the double-dip concerns aside.
Procter & Gamble fell 3.4 percent after the maker of Tide and Pampers reported a sharp drop in its net income, though sales rose and the firm projected sales growth for the year ahead.
And Dow Chemical tumbled 10 percent after the chemical company reported a smaller-than-expected profitas three plant outages overshadowed an increase in sales across the board.
Meanwhile, Pfizer jumped more than 5 percent after the drug maker beat earnings and revenue expectations, helped by cost savings from its merger with Wyeth. The company alsosaid its full-year earnings will be at the high end of its expected range.
Homebuilder D.R. Horton swung to a profit but fell short of forecasts, while handbag maker Coachtopped expectations, helped by price cuts.
And Sykes Enterprises dropped another 22 percent after the business-process outsourcing firm missed its earnings target and slashed its full-year outlook.
Shares of Anadarko , CBS and ElectronicArts were lower ahead of their earnings reports after the bell.