Stocks sink on Spain report, Mosaic miss

NEW YORK -- Mixed signals on the world economy tugged major stock indexes lower on Tuesday.

The country's largest fertilizer company, Mosaic, said weak demand from China and India weighed on its profits. Mosaic, Dupont and stocks of other companies in the materials industry fell. Indexes took another turn lower after Spain's prime minister said that he's not preparing a request for a bailout loan.

The Dow Jones industrial average was down 69 points at 13,446 at 3 p.m. Eastern. Dupont led the Dow lower, sinking $1.02 to $49.34.

Traders have been anticipating that the Spanish government would ask for help for nearly a month. Spain needs to ask for money from Europe's bailout fund before the European Central Bank can start buying its government bonds.

The Standard & Poor's 500 index dropped five points to 1,439, while the Nasdaq composite fell 10 points to 3,103.

Utilities and health care stocks, where investors often retreat in a slow-growing economy, were the only two industry groups in the S&P 500 to rise. Material companies fell the most.

Mosaic reported net income and sales early Tuesday that fell short of analysts' estimates. The company blamed slumping demand for its fertilizer overseas as well as hurricanes for slower production. The results pushed the company's stock down $2.60 to $55.42.

The market could look quiet until the government gives its monthly jobs report on Friday, said Paul Zemsky, chief investment officer of multi-asset strategies at ING Investment Management. Economists expect the unemployment rate increased to 8.2 percent in September from 8.1 percent in August.

Zemsky said a surprise swing up or down "could change the direction of the stock market and the Presidential election."

Most car makers reported better sales for September. But sales for U.S. automakers were mostly flat. General Motors reported a slight increase in sales from a year earlier, but its stock gained 3 percent after the hedge-fund manager David Einhorn recommended it. GM rose 75 cents to $23.83.

Core Logic, a private provider of real estate data, said U.S. home prices in August rose 4.6 percent compared with the same month last year. Prices also rose 0.3 percent from July, the sixth consecutive month of gains.

Other gauges of the housing market have improved in recent months, including home sales.

On Monday, the manufacturing survey from the Institute for Supply Management also showed improvement. ISM's main index nosed above 50, a reading that signals growth. The index had been below 50 from June through August.

Investors are also looking ahead to quarterly earnings, which begin in earnest when the aluminum company Alcoa reports results Oct. 9.

Elsewhere Tuesday, the yield on the benchmark 10-year U.S. Treasury note slipped to 1.61 percent from 1.63 percent Monday after Spain's prime minister, Mariano Rajoy, said a bailout request wasn't coming.

European markets closed slightly lower before Rajoy spoke. Benchmark stock indexes fell 0.3 percent in Germany, 0.2 percent in Britain and 0.6 percent in France. Borrowing costs fell slightly for Spain and Italy.

Among other stocks making big moves:

_ Reports that Deutsche Telekom may buy the cellphone carrier MetroPCS Communications sent MetroPCS's stock up 18 percent. Bloomberg News reported that the board of Deutsche Telekom, which owns T-Mobile USA, would vote to approve the deal Wednesday. MetroPCS gained $2.04 to $13.56.

_ PetSmart rose 85 cents to $68.41. Standard & Poor's said the pet-store chain will replace Sunoco in the S&P 500 index at the end of trading Thursday. The S&P 500 is the most commonly used benchmark for stock mutual funds. When a company joins the index, mutual fund managers are more likely to buy it. Sunoco was bought by Energy Transfer Partners.