Stocks continued to plunge Tuesday as investors focused on the European Union's efforts to address Ireland's debt troubles.
TheDow Jones Industrial Average fell nearly 200 points, dipping below 11,000 earlier, after eking out a gainMonday after stocks slumped in the last hour of of the trading session.
Alcoa, Travelers, and American Express led the blue-chips lower. Home Depotand Wal-Mart were the only Dow components to rise.
The S&P 500 and the Nasdaq also slid. The CBOE Volatility Index, widely considered the best gauge of fear in the market, soared more than 12 percent to nearly 23.
The key S&P 500 sectors all skidded, led by energy, materials and financials.
The dollar , meanwhile, rose against a basket of currenciesand the euro, as Ireland's troubles weighed on the currency.
In Europe, the European Union was weighing a rescue package for Ireland that would include the International Monetary Fund, according to the Wall Street Journal. The money would come from the European Financial Support Facility, which was formed in the wake of Greece's near-default last May, the Journal said.
European finance ministers were meeting in Brussels to discuss a mechanism for resolving the euro-zone crisis. A possible bailout of Ireland was expected to be discussed.
The Irish government was expected to make a statement on the situation.
Commodities fell on speculation China may take more aggressive steps than initially thought to stem inflation. There were also rumors that China would enact food price controls. The price of oil skidded more than 2 percent to just above $83 a barrel, while gold fell below $1,350.
Consol Energy , Tesor
and RowanCompanies were the worst performers among energy stocks. Freeport-McMoran Copper & Gold , Allegheny Technologies , a specialty metals company, and steel producer Nucor also suffered.
In earnings news, Home Depotposted net earnings of 51 cents per share for its fiscal third-quarter, up from 41 cents per share in the same period last year. The home-improvement retailer also raised its guidance for the full year.
In addition, Wal-Mart posted a higher quarterly profitand raised its full-year earnings forecast, but U.S. same-store sales declined as its shoppers remain under pressure in a weak economy.
High-end retailer Saks reported a sharply higher quarterly profit, helped by a surge in luxury spending, as financial markets healed and shoppers grew more willing to pay full price for its wares, and said it expects those trends to continue during the holiday quarter.
Abercrombie & Fitch posted a bigger quarterly profit and the teen apparel retailer beat Wall Street estimates, led by strong demand in international markets.
TJX beat its own forecasts by reporting a 7 percent rise in third-quarter earnings, as the discount retailer benefited from shoppers interested in getting the most from their dollar. Sales at the TJX rose 5.4 percent for the quarter.
The retail sector was lower, although there were some bright spots after better-than-expected October retail sales dataMonday. Mattel , Gamestop and Bed Bath & Beyond were all higher.
Honeywelllowered its forecast for earningsthis year to about $1.86 a share from its previous forecast of $2.52 a share, but the revision reflects a change in pension accounting.
Big money managers reported quarterly holdings after the market closed Monday. Berkshire Hathaway added Bank of NY Mellon to its holdings. The filing showed Berkshire shedHome Depot, Republic Services ,
Carmax , Iron Mountain and
NRG Energy . Other big investors, including Soros Fund Management and Pershing Square also released their quarterly holdings on Monday.
Revised tax treaties between Switzerland and other European countries may cause UBS to lose up to $41 billionin customer withdrawals, UBS said Tuesday. The bank said Tuesday that "15-40 billion francs are still at risk as a result of changes in the tax regulations."
New York Fed President Bill Dudley backed up comments from Treasury Secretary Timothy Geithner last week by saying that Fed policy is not intended to weaken the dollar.
Treasury international capital flow data is due at 9 a.m. The releases its housing index at 10 a.m.
Asian stocks also saw heavy selling. The Shanghai Composite Index fell 4 percent on worries about rate tightening in China to combat inflation.
In U.S. economic news, an index of home building sentiment in the U.S. rose slightly, but less than expected, for a second month, although the index remains historically low, according to a survey released by the National Association of Home Builders/Wells Fargo Housing Market on Tuesday. The index rose to 16 from 15 last month.
The producer price index rose 0.4 percentin October, the same level as September, but core PPI, which excludes volatile food and energy prices, fell 0.6 percent, after rising 0.1 percent in September. The drop was the biggest since July 2006, and has triggered disinflation concerns.
U.S. industrial production was weaker-than-expected in October, coming in flat, according to Federal Reserve data released Tuesday. Economists surveyed by Reuters had expected a 0.3 percent gain. Manufacturing rose 0.5 percent, but utilities output dropped 3.4 percent, dragging down the overall index.
The capacity utilization rate, a measure of slack in the economy, was flat at 74.8 percent, 5.8 points below average from 1972-2009.
Foreign buying of U.S. debt fell in September, although China and Japan, top buyers, added to their holdings, U.S. Treasury Department said Tuesday. The net long-term capital inflow fell to $81 billion in September, from an inflow of $128.7 billion a month earlier.
Coming Up This Week:
TUESDAY: Microsoft shareholders meeting, Atlanta Fed Pres Lockhart speaks.
WEDNESDAY: Weekly mortgage applications, CPI, housing starts, oil inventories, St. Louis Fed Pres Bullard speaks, GM IPO pricing, LA auto show kicks off, Qualcomm analyst meeting; Earnings from Target and Applied Materials.
THURSDAY: Weekly jobless claims, leading indicators, Philadelphia Fed survey, Cisco shareholder meeting; Earnings from Dell and Gap.
FRIDAY: Bernanke speaks at ECB Central Banking Conference, Harry Potter movie premieres.
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