Wall Street Sags On Consumer, Credit Worry

U.S. stocks fell on Tuesday after retailers Wal-Mart Stores Inc. and Home Depot Inc. gave disappointing earnings reports.

U.S. stocks fell on Tuesday after retailers Wal-Mart Stores Inc. and Home Depot Inc. gave disappointing earnings reports, sparking concern that trouble in the housing market was weighing on the consumer.

Financial stocks declined on the latest signs of a tightening credit environment. Trustees for two Canadian trusts said they were unable to issue new securities to repay maturing commercial paper and that a bank had declined to provide liquidity.

"It's an area of the credit market where we haven't seen problems arising," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

"It is definitely going to make people feel even less comfortable about the market. Not only the credit market, but it's potential impact on the equity market."

The Dow Jones industrial average was down 87.14 points, or 0.66 percent, at 13,149.39. The Standard & Poor's 500 Index was down 11.20 points, or 0.77 percent, at 1,441.72. The Nasdaq Composite Index was down 14.87 points, or 0.58 percent, at 2,527.37.

Wal-Mart reported earnings that missed analysts' estimates and reduced its forecast for full-year profit from continuing operations. For details, see ID:nN14402979. Home Depot reported a lower quarterly profit as the softer U.S. housing market hurt sales. ID:nN13356459.

Wal-Mart shares dropped 5.2 percent to $43. Home Depot stocks fell 2.6 percent to $34.33, both on the NYSE.

Big brokerage stocks were some of the sharpest losers on the S&P 500. Shares of Goldman Sachs were down 2.2 percent to $173.58 and Lehman Brothers lost 3 percent to $55.60.