(REUTERS)--Stocks fell for a fifth day in a row on Tuesday, having lost more than 5 percent over that period as borrowing costs in Spain hit another record high.
The market remains anchored by concerns about the worsening debt crisis in Europe where rising yields suggest the outlook continues to deteriorate and stocks have been tied to the European credit market's volatility.
News that the International Monetary Fund would make short-term credit available for struggling euro-zone countries gave stocks a temporary boost, but the gains quickly evaporated.
Spain's short-term borrowing costs hit a 14-year high on Tuesday as political uncertainty about a solution to the euro zone's sovereign debt crisis punished another vulnerable southern European country.
The S&P managed to hold near 1,187, seen as the next technical support, representing the 61.8 percent retracement of the 2011 high to low. The index fell below the 1200 mark last week.
Joseph Cusick, senior market analyst at OptionsXpress Holdings Inc in Chicago, said the stock market is currently battered and is reaching a technically oversold level.
I will be watching the 1,200 level on the S&P. If reached, it would reclaim about 50 percent of the latest two-day pullback, potentially acting as a pivot area for the bulls.
The Dow Jones industrial average <.DJI> was down 53.59 points, or 0.46 percent, at 11,493.72. The Standard & Poor's 500 Index <.SPX> was down 4.94 points, or 0.41 percent, at 1,188.04. The Nasdaq Composite Index <.IXIC> was down 1.86 points, or 0.07 percent, at 2,521.28.
Before Wall Street's opening bell, data showed the U.S. economy grew at a 2 percent annual rate in the third quarter. While down from the government's prior estimate of 2.5 percent one month ago, reduced inventories and solid consumer spending could result in better-than-expected growth in the fourth quarter.
The market showed a muted reaction to minutes from the Federal Reserve's recent policy meeting in which some officials said they were prepared to do more to support the domestic economy. But the committee decided to hold off taking action amid an uncertain outlook.
Hewlett-Packard Co dropped 0.8 percent to $26.65 after the computer and printer maker gave a 2012 profit outlook that was below consensus late Monday.
Among Nasdaq stocks, Groupon Inc slumped as much as 14 percent on Monday on concern about increased competition, leaving shares of the largest daily deal company at $20.07 compared with their $20 initial public offering price.
In total, about 6.99 billion shares exchanged hands on the New York Stock Exchange, NYSE Amex and Nasdaq, below the current daily average of 8 billion shares.
On the NYSE, decliners beat advancers by 18 to 11, while on the Nasdaq, about two stocks fell for every one that rose.
(Reporting by Angela Moon, Editing by Kenneth Barry)