The Dow retreated Tuesday, after briefly turning positive, as a sharp drop in consumer confidence rattled the market.
The Dow was down more than 90 points in afternoon trading, led by Alcoa and Caterpillar.
Ten of 10 key S&P sectors were lower, led by materials, information technology and energy.
The dollar gained against the eurobut fell against the yen. Oil fell below $79 a barrel, while gold dropped to around $1,100 an ounce.
Stocks remained lower after the Treasury's two-year auction was met with decent demand: The high yield was 0.895 percent and the bid-to-cover ratio was 3.33.
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.
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.
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.
The Treasury will sell $44 billion in 2-year notes, with results available shortly after 1 pm. It will follow up by selling $42 billion in 5-year notes tomorrow, and $32 billion in 7-year notes Thursday.
Today is the first of two days of Congressional hearings — involving different committees — on Toyota's recall issues. Toyota's top North American executive, Jim Lentz, will appear 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.
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.
TUESDAY: Case-Shiller home-price index; consumer confidence; Peter Madoff hearing; Toyota recall hearing; two-year note auction; Fed's Bullard speaks; Earnings from Home Depot, garmin, Macy's, Sears, and Target
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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