Market Became Lower cused by Profit warnings

U.S. stocks fell on Tuesday as profit warnings from retailer Sears Holdings Corp. (SHLD.O) and home builder D.R. Horton Inc (DHI.N) fueled concerns about the economy's health and the earnings outlook.

Home Depot Inc. (HD.N) , the largest U.S. home improvement chain, also rattled the market, at least initially, with a warning. But news that it planned to buy back about 12 percent of its stock lifted the share price.

Investors sold shares of industrial conglomerates such as United Technologies Corp (UTX.N) and General Electric (GE.N) on concern that the latest profit warnings pointed to slackening consumer spending as slump in housing take its toll.

Consumer spending accounts for about two-thirds of U.S. economic activity.

"The U.S. is in a slow growth environment," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto, Canada.

"If you take into account what companies such as Home Depot and Sears are saying, I think this thesis that earnings are going to beat expectations is going to come under pressure."

The Dow Jones industrial average (.DJI) was down 65.84 points, or 0.48 percent, at 13,584.13. The Standard & Poor's 500 Index (.SPX) was down 10.63 points, or 0.69 percent, at 1,521.22. The Nasdaq Composite Index (.IXIC) was down 14.74 points, or 0.55 percent, at 2,655.28.

Shares of Sears Holdings Corp. (SHLD.O) led losses on the Nasdaq with a 6.5 percent slide to $160.31, while retreating oil prices dragged on shares of Exxon Mobil Corp (XOM.N), making the stock the biggest loser on both the Dow and the S&P 500.

Shares of United Technologies, a diversified manufacturer, dropped 0.5 percent to $72.22 on the New York Stock Exchange, while those of GE, a stock seen as an economic bellwether, fell 0.9 percent to $38.26.

D.R. Horton, the largest U.S. home builder, forecast a third-quarter quarter loss, sending its stock down 2.1 percent to $19.36 on the NYSE. The Dow Jones home construction index dropped 1.5 percent.

Shares of financial companies, including investment banks, also fell, after rating agency Standard & Poor's downgraded 612 subprime related debt offerings. Shares of Bear Stearns (BSC.N) dropped 2 percent to $140.99.

But shares of Home Depot edged up 0.6 percent to $40.48 on the NYSE.

Aluminum producer Alcoa Inc (AA.N) kicked off the reporting season on Monday, posting a profit that matched Wall Street's estimates. Alcoa shares were off 0.1 percent at $42.33.