Stocks end mostly lower even as oil prices retreat

Intel Corp. also rose ahead of its earnings, which were released after the market closed Tuesday and showed a 25 percent profit increase that beat analysts' expectations. After advancing 24 cents to $20.71 in regular trading, Intel shares rose another 29 cents to $21.00 in after-hours trading.

Treasury prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.82 percent from 3.86 percent late Monday.

Among the stronger stocks of the day were Lehman, which rose 82 cents, or 6.6 percent, to $13.22; WaMu, which rose 38 cents, or 11.8 percent, to $3.61; and First Horizon, which rose 85 cents, or 16.9 percent, to $5.89. First Horizon named a new CEO on Tuesday.

But Fannie Mae fell $2.66, or 27 percent, to $7.07, and Freddie Mac fell $1.85, or 26 percent, to $5.26. Treasury Secretary Henry Paulson said that if the government extends financial backing to the two institutions, it will be done "under terms and conditions that protect the U.S. taxpayer."

In a bid to protect Fannie Mae and Freddie Mac, Securities and Exchange Commission Chairman Christopher Cox said to Congress Tuesday that the SEC will broaden existing rules prohibiting naked short selling of banks and broker dealers.

Short-selling is a type of speculation, where a trader sells securities he doesn't own; essentially, it's a bet that a stock will fall. Naked short-selling is when a trader makes such a bet without arranging to borrow the stock first.

Another big decliner was American International Group Inc., which suffered the worst percentage drop in the Dow on Tuesday. AIG shares fell $1.20, or 5.32 percent, to $32 after a Wachovia analyst lowered his rating and earnings estimate for the beleaguered insurer.

Citigroup Inc., another Dow stock, traded as low as $14.01 Tuesday before closing down 66 cents, or 4.3 percent, at $14.56. Citigroup has not traded that low since the company was formed on Oct. 8, 1998, after the merger of Citicorp and Travelers Group. That day, the stock slid to $13.29.

General Motors Corp. saw the largest rebound among the 30 Dow stocks after announcing plans to lay off salaried workers, reduce truck production, suspend its dividend and borrow $2 billion to $3 billion as it adjusts to a weakening U.S. market. GM shares rose 46 cents, or 4.9 percent, to $9.84.

In economic data, the Labor Department said core inflation at the wholesale level, which excludes energy and food, ticked up by just 0.2 percent, but that overall wholesale prices jumped by a larger-than-expected 1.8 percent--the biggest gain since November.