The Dow Jones Industrial average finished down 92.01 points, or 1.07%, to 8,535.39. The broader Standard & Poor's 500-stock index fell 7.44 points, or 0.82%, to 902.96. The tech-laden Nasdaq composite index gave up earlier gains, falling 8.48 points, or 0.61%, to 1,391.85.
Among Tuesday's economic data releases, the consumer price index rose 0.1% in November, after a 0.3% increase in October. Excluding volatile food and energy prices, the CPI rose 0.2%. The modest increase was not surprising, and could be a sign that inflation will be tempered. Also released Tuesday morning, November housing starts increased 2.4% -- a positive sign but in line with expectations.
The Federal Reserve announced U.S. industrial production in November rose 0.1% -- the first increase in four months. The rise came off a revised 0.6% drop in October. Economists had expected a 0.2% increase in November.
Capacity utilization rose to 75.6% in November, up from 75.5% in October.
Still more data were coming the rest of the week. Investors expected October trade balance numbers Wednesday. November leading indicators were slated for Thursday, and the Gross Domestic Product figure for the third quarter was due to come on Friday.
The fairly upbeat economic news counterbalanced concerns in the commodities markets. Oil and gold came off recent highs, and the dollar--which had been weaker amid geopolitcal concerns--pared losses after the White House expressed support for a strong greenback.
Along with the economic data, investors took in mixed earnings reports.
A lackluster sales outlook from Dow component McDonald's (MCD
) dragged on the blue-chip average. Shares in McDonalds fell 7.94%, after the fast-food giant said it would lose five to six cents per share the fourth quarter -- its first quarterly loss ever. Still, Lehman Brothers upgraded McDonald's Tuesday to an equal weight from underweight.
The retailing sector took some lumps Tuesday. Shares of discount chain Target (TGT
) dipped 6.45% Tuesday. Late Monday, the company warned it would not meet December sales growth forecasts.
Investors received bad news from home electronics merchant Circuit City Stores (CC
) before the opening bell. Circuit City said it lost 10 cents a share in the third quarter. The shares fell 11% on the day.
Faring better was Circuit City's largest competitor, Best Buy (BBY
). The company posted third quarter profits of 26 cents a share, in line with anaylsts' expectations. However, the company lowered its fourth quarter profit forecast and the stock fell 5.5% Tuesday afternoon.
Shoe company Nike (NKE
) saw its shares slide. Shoe and apparel retailer Foot Locker (Z
) said in a 10-Q filing Monday that it would reduce purchases of Nike goods twice as much as its previously announced $150 million to $200 million cutback. Nike--which will announce second quarter earnings on Thursday-- fell 3.5%.
Telecommunications company Nextel (NXTL
) rose Tuesday. The shares were up 3.2% as Nextel affirmed previous year-end profit forecasts.
After Tuesday's closing bell, investors anticipated a first quarter earnings report from computer memory maker Micron Technologies (MU
). According to Schaeffer's Investment Research, Micron's announcement could set the tone for trading Wednesday.
More companies were expected to report quarterly earnings Wednesday. Retailer Bed Bath & Beyond (BBBY
), shipping company FedEx (FDX
, and technology companies Oracle (ORCL
) and Palm (PALM
) were all scheduled for announcements Wednesday.
U.S. Treasury prices finished higher across the yield curve Tuesday afternoon, with shorter-dated issues posting the strongest gains, as stocks remained sluggish and economic data was generally positive but unsurprising.
"Subdued inflation going forward ... should continue to provide the Fed a lot of flexibility in maintaining a very accommodative monetary policy," notes economic research firm MMS International.
European markets finished lower. London's FTSE 100 index fell 75.30 points, or 1.89%, to 3,908.70. In Germany, Frankfurt's DAX Index fell 65.32 points, or 2.04% to 3,139.97. The Paris CAC 40 slid 35.24 points, or 1.11%, to 3,138.61.
In Asia, stocks edged higher after Monday's losses. In Japan, the Nikkei 225 Index avoided a tenth-consecutive losing session, finishing up 59.79 points, or 0.71%, to 8,510.73. In Hong Kong, the Hang Seng index gained 59.28 points, or 0.61%, to 9,715.74.