U.S. stocks nose-divided in the final hour of Tuesday trading on rising consumer debt, higher oil prices, and traders grew bearish on weak housing economic data.
The Dow Jones Industrial Average lost 238.42, or 1.86 percent, to 12,589.07, while the S&P 500 slipped 25.99, or 1.84 percent, to 1,390.19 erasing a 14-point advance. The Nasdaq Composite Index lost 1.21 to 2,500.67, its eighth-straight loss.
Steep losses in financials, techs, capital goods and telecoms far outweighed gains health care. Most of the losses were led by rumors that mortgage lender Countrywide might be headed for bankruptcy protection, AT&T's news about cutting off customers and by an 11 percent jump in credit-card debt in November.
A steeper-than-expected drop in pending home sales was caused by two weak reports from the National Association which showed the Realtors' Pending Home Sales Index declined 2.6 percent in November.
With job losses mounting, this could be the tip of the iceberg with consumers needing to rely more on credit cards now that personal income is lagging, Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi, told Bloomberg.