Stocks continued to decline Tuesday amid mixed U.S. economic data and concern the European debt crisis would spread to other nations.
The Dow Jones Industrial Average fell more than 45 points, after dropping more than 100 points earlier. On Monday, the Dow rebounded at the end of the sessionto close less than half a percent down, leaving the blue-chip index 0.6 percent lower for the month.
JPMorgan , Pfizer, and Procter & Gamble led blue-chips lower. Wal-Mart and Disney rose.
The S&P 500 and the Nasdaq also sank. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose to nearly 23.
All the major indexes were on track for the worst November performance in two years, as of mid-morning.
Most key S&P sectors declined, led by technology, health care, and energy.Telecom rose.
European worries pushed the euro to 10-week lows, as the dollar rose against a basket of currencies. Gold ralliedabove $1,384 an ounce.
While U.S. investors were concerned about events unfolding in Europe, as well as the geopolitical ramifications of tensions on Korean peninsula, the events have been an excuse for stock prices to consolidate ahead of more significant news about the U.S. economy, said Quincy Krosby, market strategist at Prudential Financial.
"The market certainly has reason to pull back a bit," Krosby said. "Now we’ll wait for more domestic U.S. data."
The big news comes on Friday, when the U.S. Labor Department releases November data on nonfarm payrolls. Krosby is hoping the figures will show continued increases in the average hourly work week and overtime for "confirmation the economy is gaining traction."
The spread between Italian and German 10-year government bond yields, and between Irish and German 10-year yields, hit a lifetime high for the euro. The market moves proved the recent bailout of Ireland hadn't drawn a line under concerns over Europe's debt situation.
Jim O'Neill, chairman of Goldman Sachs Asset Management, told CNBC.com that European policy makers need to act together to stem the debt crisis or risk market pressures forcing a structurally vital country like Italy to need a bailout.
Portugal was also in the spotlight after the country's central bank warned its banks may face an "intolerable risk" if the country fails to consolidate its public finances.
Fears of debt problems were also present in the U.S., where a poll conducted by CNBC and Associated Press revealed that a majority of Americans think taxes will have to be raised and government services will have to be reduced in order to cut the federal deficit.
In corporate news, Google was close to a deal to buy online discounter Groupon for $5 billion to $6 billion, according to reports. The deal, which could happen this week, would be Google's largest acquisition.
Seagate Technologies slumped a day after the maker of computer disk drives said it was calling off talks with private equity firms to take the company private. RBC, meanwhile, cut the company's price targer to $13 to from $15.
Barnes & Noble shares sank nearly 10 percent after reporting a weak outlook, and a bigger loss for the year than forecast. For the fiscal second-quarter, the bookstore chain's loss narrowed, but its revenue fell short of expectations.
Merck announced Kenneth Frazier, currently president of the drugmaker, will become chief executive officerwhen CEO Richard Clark retires early next year. Clark will continue as chairman of the board.
Lowe's backed its profit and sales estimates for this year, and said it would unveil plans to continue growth. The home improvement retailer is holding an analyst and investor meeting.
Wal-Mart shares rose despite news Japan will open an investigationin possible insider trading in Seiyu, Wal-Mart's Japanese subsidiary, when the U.S. retailer turned the Japense retailer into a fully owned unit in 2007.
European shares were mixed and struggled to find direction amid the concerns and Asian indexes closed mostly lower. European worries alsopushed the euro to 10-week lows, as the dollar rose against a basket of currencies.
On the economic front, the news was mixed. Among positive reports, consumer confidence rose to 54.1 in Novemberfrom 49.9 in October, according to the Conference Board. The November level was the best seen since June. Analysts surveyed by Reuters had forecasted a median reading of 52.6.
But home prices fell 1.5 percent in September, according to the Standard& Poor's/Case-Shiller house price index. Nationally, home prices fell 2 percent from a year earlier. Economists had expected home prices to rise 1.0 percent in September.
analysts expect U.S. auto sales in Novemberheld above 12 million vehicles on an annual basis, a gain of about 10 percent from a year earlier. Sales were boosted by discounts and a slow return of consumer demand, analysts said. Actual figures will be released by the auto companies on Wednesday.
In another positive sign for the U.S. economy, business activity in the Midwest grew more than expected in November. The Institute for Supply Management-Chicago business index rose to 62.5 in November, up from 60.6 in October. Economists had forecast a November reading of 60.0. The employment component of the index rose to 56.3 from 54.6 in October, while new orders rose to 67.2, from 65.0.
The expiring Bush tax cuts will be under discussion when President Obama meets with Republican leaders at a return to Congress later in the session.
On Tap This Week:
TUESDAY: Minnesota Fed Pres Kocherlakota speaks, Bernanke speaks, Obama meets with Congressional leaders
WEDNESDAY: Auto sales, MBA mortgage applications, Challenger job-cut report, ADP employment report, productivity and costs, ISM mfg index, construction spending, oil inventories, Beige Book, Fed vice chair Yellen speaks
THURSDAY: ECB announcement, jobless claims, pending home sales, Philadelphia Fed Pres Plosser speaks, Fed Gov. Duke speaks, chain-store sales; Earnings from Toll Brothers, Del Monte and Kroger
FRIDAY: Employment situation, factory orders, ISM non-mfg index
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