Stocks ended lower in a thin, volatile session Tuesday, with the S&P and Nasdaq logging a fifth-consecutive decline as investors remained cautious over uncertainty in the euro zone and after a tepid GDP report.
The Dow Jones Industrial Average declined 53.59 points, or 0.46 percent, to close at 11,493.72, led by Alcoa and BofA .
The S&P 500 edged down 4.94 points, or 0.41 percent, to finish at 1,188.04. The Nasdaq slipped 1.86 points, or 0.07 percent, to end at 2,521.28.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished near 32.
Most S&P sectors finished lower, led by energy and utilities.
Stocks came off their worst levels earlier after the IMF unveiled a new six-month liquidity linein an effort to aid euro zone nations affected by the sovereign debt crisis.
“This was what I had expected and it is also my fear—you can’t solve a solvency problem with extra liquidity,” said Brian Battle, vice president of trading at Performance Trust Capital Partners. “It’s not a good signal that the Europeans will need the IMF and [eventually,] the U.S. will be called to help.”
Stocks plunged sharply in the previous session, as the lack of progress in dealing with heavy debt both in the U.S. and Europe further sapped investor confidence in equities.
Meanwhile, ratings agencies Moody’s and Standard & Poor’s said there were no immediate plans to downgrade the credit rating of the U.S. following the failure of a bi-partisan Congressional “super committee” to reach agreement on reducing the U.S. budget deficit.
But Fitch, the third leading ratings agency, which currently has the most positive rating of the three on U.S. debt, said it could cut the outlook on its "triple-A" rating, with a downgrade an outside possibility.