NEW YORK (AP) The stock market put its big rally on hold Tuesday after disappointing earnings and economic reports reminded investors of the obstacles still facing the economy.
The Dow Jones industrial average fell 38 points after rising 208 Monday on brighter economic news. All the major indexes fell moderately.
Investors were unhappy with just about every major earnings or economic report Tuesday. Procter & Gamble Co. and Dow Chemical Co. reported earnings and revenue that fell short of forecasts. Consumer spending and income figures showed that people are still very cautious with their money. Factory orders fell in June, as did the number of homes that were under contract to be sold.
The stream of bad news was a reminder that the recovery is going to be bumpy and slow. So, after the markets pattern of recent months, they gave back some of Mondays big gain, which was sparked in part by manufacturing news that was better than expected. Trading has been erratic since the spring amid the conflicting signals about the recovery, and many traders are quick to cash in any profits.
Traders are also uneasy ahead of the Labor Departments July employment report due out Friday. Consumers are not expected to significantly increase their spending until they feel more secure about their jobs.
Dan Cook, a Chicago-based senior market analyst with the brokerage firm IG Markets, said many traders stayed out of the market while they waited for the employment report.
These severely choppy markets are scaring individual investors, he said. Theres no way we can get them back in the game without getting the employment numbers up.
The government is expected to report that employers cut 65,000 jobs last month, but that includes temporary census workers who were laid off. The unemployment rate is expected to have risen to 9.6 percent from Junes 9.5 percent.
Investors are also uneasy about two other labor market reports this week. The payroll company ADP today will release its count of the number of jobs created or lost at private employers in July. And on Thursday, the Labor Department issues its weekly report on the number of laid-off workers who filed for unemployment benefits for the first time.
The Dow fell 38.00, or 0.4 percent, to 10,636.38. The Standard & Poors 500 index fell 5.40, or 0.5 percent, to 1,120.46, while the Nasdaq composite index fell 11.84, or 0.5 percent, to 2,283.52.
Losing stocks were ahead of gainers by 2 to 1 on the New York Stock Exchange, where consolidated volume came to a very light 4.1 billion shares, down from 4.2 billion Monday. Light volume can intensify stocks price swings.
Investors sought the safety of Treasury bonds, which pushed interest rates lower. Reports the Federal Reserve could start buying bonds again also added to their strength. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.92 percent from 2.97 percent late Monday.