Stocks fell on Wednesday as warnings about the impact of Europe's debt crisis on the global economy kept investors cautious, but optimism about the U.S. economy limited losses.
The debt crisis weighed on shares of financials and materials, with the S&P financial index down 0.8 percent.
U.S. economic data showed consumer prices fell in October for the first time in four months. Another report showed home builders in the United States grew more optimistic this month.
It's almost as if it needs bad news from Europe to go down. The news on the U.S. economy has looked pretty good, and it even looks like it's gaining momentum, said Charles Lieberman, Chief investment officer of Advisers Capital Management, LLC in Hasbrouck Heights, New Jersey.
A home construction index was up 2.8 percent.
Stocks have shown some resilience, clinging to the higher end of their recent trading range on the S&P 500.
Overseas, Bank of Japan Governor Masaaki Shirakawa said the crisis was already affecting emerging nations and Japan in multiple ways, while the Bank of England forecast Britain was on the brink of a contraction and warned against inaction.
Fears grew the crisis was moving to economies that had been considered more insulated from the problems. The yield spread of 10-year French government bonds over their German equivalents widened to a euro-era high.
The Dow Jones industrial average was down 38.06 points, or 0.31 percent, at 12,058.10. The Standard & Poor's 500 Index was down 4.44 points, or 0.35 percent, at 1,253.37. The Nasdaq Composite Index was down 9.73 points, or 0.36 percent, at 2,676.47.
Among declining stocks, Dell Inc, the computer maker, missed quarterly revenue estimates and said full-year revenues could be hurt by an industrywide shortage of hard drives. The shares fell 2.3 percent to $15.27.
Shares of Abercrombie & Fitch Co slumped 12.1 percent to $48.98 after the teen clothing retailer's quarterly profit missed estimates by a huge margin.
Trading volume was 4.7 billion shares, which was average to light. Decliners topped advancers on the New York Stock Exchange by about 3 to 2.
(Reporting by Caroline Valetkevitch; additional reporting by Edward Krudy; editing by Kenneth Barry)