NEW YORK - Wall Street moved slightly lower on Tuesday after a disappointing reading on pending home sales offset another plunge in oil prices.
Investors remained hesitant to buy into the market, especially after a big rally in the previous session, after a disappointing report that indicated pending U.S. home sales fell more than expected in July as the housing market continued to struggle.
The National Association of Realtors said its seasonally adjusted index of pending sales for existing homes fell 3.2 percent to a reading of 86.5 from an upwardly revised June reading of 89.4. The index was 6.8 percent below year-ago levels, and missed projections for a reading of 88.6.
That offset optimism as oil prices sank below $105 a barrel as Hurricane Ike appeared to be headed away from energy installations in the Gulf Coast. In addition, comments from Saudi Arabia suggested that OPEC could decide to keep crude output steady despite worries about rapidly falling prices.
The moderate decline in all three major stock indexes comes a day after most stocks jumped on the announcement of the government's plan to take over mortgage giants Fannie Mae and Freddie Mac. Investors had been worried that the companies, which hold or back about half the nation's mortgage debt, would succumb to a spike in bad loans. The government's move helped shore up confidence in sectors like financials and home builders.
In midmorning trading, the Dow Jones industrial average fell 39.17, or 0.34 percent, to 11,471.57.
Broader indexes were also moderately lower. The Standard & Poor's 500 index shed 11.42, or 0.90 percent, to 1,256.37; the Nasdaq composite fell 4.61, or 0.20 percent, to 2,265.15.
The Dow jumped 2.6 percent Monday while the S&P 500 rose 2.1 percent and the technology-heavy Nasdaq composite index added 0.62 percent.
Bond prices edged higher Tuesday. The yield on the benchmark 10-year Treasury note fell to 3.67 percent from 3.68 percent late Monday.
Light, sweet crude fell $2.01 to $104.33 on the New York Mercantile Exchange. The dollar was mixed against other major currencies, while gold prices fell.
In corporate news, McDonald's Corp. said its same-store sales, or sales at stores open at least 13 months, rose 4.5 percent in the U.S. in August and 8.5 percent globally. Shares rose $1.55 to $63.97.
Apple Inc. shares rose 28 cents to $158.16 as the company is expected to unveil new iPod music players and possibly lower the prices on notebook computers at a big even being held in San Francisco during the afternoon.
Lehman Brothers Holdings Inc. shares plunged to a 52-week low on speculation that an investment from South Korea's government owned Korea Development Bank remained in doubt. The two sides are said to have called off talks, according to media reports. The stock dropped $2.52, or 17.8 percent, to $11.62.
The Russell 2000 index of smaller companies fell 2.24, or 0.31 percent, to 730.62.
Declining issues barely outnumbered advancers on the New York Stock Exchange, where volume came to 200.1 million shares.
Overseas, Japan's Nikkei stock average fell 1.17 percent. In afternoon trading, Britain's FTSE 100 rose 0.47 percent, Germany's DAX index added 0.20 percent, and France's CAC-40 fell 0.18 percent.