NEW YORK – Stocks ended down Tuesday after investors reacted to disappointing news about consumer confidence.
The Dow Jones industrial average closed down 110.15, or 1.1 percent, at 9,872.60, according to preliminary calculations, after dropping as much as 151 points earlier in the session.
Broader stock indicators also struggled. The Standard & Poor's 500 index slipped 7.92, or 0.7 percent, to 1,149.50, while the Nasdaq composite index lost 5.26, or 0.3 percent, to 1,935.97.
The Dow tumbled after the New York-based Conference Board reported its index of consumer confidence fell to 82.2 in November from 85.3 the previous month. Analysts had been predicting 86.5.
Still, selling appeared to stabilize somewhat late in the day. Technology stocks, which have enjoyed a particularly noticeable advance in the last few sessions, regained ground after a rocky start.
"The confidence number came out and that seemed to bother people," said Uri Landesman, chief investment officer with AFA Management Partners. "Christmas buying season is going to be pretty important, not just to retail stocks, but the market as a whole, so when you see a lower confidence number, that causes you to have less confidence the (sales) numbers will be ok."
Consumer confidence is closely watched, since consumer spending accounts for two-thirds of the economy. Stronger-than-expected sales of existing homes in October didn't immediately compensate for the consumer confidence disappointment.
The data intensified investors' worries that the market's recent runup, in which the major indexes returned to their pre-Sept. 11 levels, was premature since corporate profits and many other growth indicators remain weak. Unemployment is also a problem.
Federal Reserve Governor Laurence Meyer said in the afternoon he thought it would be a mistake for the U.S. central bank to move slowly on lowering interest rates. His comments sparked hopes that more rate cuts could be in the cards to revive the flagging economy.
Among individual stocks, Intel, the world's largest chip maker, rose 44 cents to $32.31, erasing losses. Intel's chief financial officer said the company is increasingly confident of meeting its quarterly revenue target.
The Philadelphia Stock Exchange semiconductor index rose 0.78 percent, extending a two-month rally on hopes the batter sector would be the first to benefit from an economic recovery.
Oil services companies headed higher after Russia said it would consider a bigger oil export cut by January. Major driller Schlumberger Ltd. climbed 92 cents to $47.22, while rival Halliburton Co. ticked up 90 cents to $21.86.
Nokia Corp. fell $1.52 to $23.72. The world's largest mobile phone maker pared its estimate for 2001 global sales of handsets, sending its share price lower even though the company said it expects to meet fourth-quarter earnings targets.
Red Hat Inc. soared more than 26 percent after the distributor of Linux software agreed to support and service the alternative operating system for International Business Machines Corp.'s servers. Red Hat was up $1.61 at $7.62 while VA Linux Systems Inc. rose 43 cents to $2.94.
Among the Dow stocks, IBM fell $1.71 to $114.62 and Microsoft Corp. shed $2.10 to $63.04. Linux is seen as an alternative to Microsoft's proprietary Windows.
Home Depot Inc. (HD.N), the world's largest home-improvement retailer, slumped $2.17 to $43.35 and dragged on the Dow. Its stock fell on Monday on fears it would see weakening profits and sales. The Standard & Poor's 500 retailing index fell 1.45 percent.
Declining issues led advancers on the New York Stock Exchange. Volume came to 1.28 billion shares, compared with 1.08 billion Monday.
The Russell 2000 index lost 0.51 to 460.71.
Overseas, Japan's Nikkei stock average dropped more than 1.0 percent. In Europe, Germany's DAX index fell 1.1 percent, Britain's FT-SE 100 lost 0.7 percent and France's CAC-40 slipped 1.7 percent.
Reuters and the Associated Press contributed to this report.