Stocks fell on Tuesday after three days of gains as weak German growth data renewed concerns about the euro zone debt crisis and the global economy.
The Dow average got some support after two components, Wal-Mart and Home Depot, rose on upbeat quarterly reports.
Worries about the euro zone troubles and a weakening U.S. economy have pushed U.S. stocks into correction territory after the S&P 500's closing high on April 29.
I think there was still a little hope out there that Germany could remain strong and help prop up the European Union, but now it looks like Germany is going to have think about itself, said Bryant Evans, portfolio manager at Cozad Asset Management in Champaign, Illinois.
Investors awaited comments from a joint news conference with German Chancellor Angela Merkel and French President Nicolas Sarkozy, coming after they met to discuss measures to contain Europe's fiscal crisis. The news conference was set for noon EDT.
Sluggish growth in Germany hobbled the euro zone economy, raising fears of a longer-term dip that could derail efforts to resolve the bloc's debt crisis.
Helping to limit losses, Fitch affirmed the U.S. credit rating with a stable outlook, in contrast to Standard & Poor's, which downgraded its top-tier credit rating on August 5.
The greatest concern for investors on sovereign debt issues related to the United States would be higher interest rates, and we're not seeing any of that, said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.
The Dow Jones industrial average <.DJI> was down 27.70 points, or 0.24 percent, at 11,455.20. The Standard & Poor's 500 Index <.SPX> was down 4.90 points, or 0.41 percent, at 1,199.59. The Nasdaq Composite Index <.IXIC> was down 17.51 points, or 0.69 percent, at 2,537.69.
Financials, seen as vulnerable to a European fiscal crisis, led the day's declines on the broad S&P 500. The S&P financial index <.GSPF> was down 0.8 percent.
Stocks rose for the last three sessions, nearly wiping out last week's losses, but the S&P 500 is still down about 5 percent since the start of the year.
Stocks saw a massive selloff on the Monday following the S&P downgrade, with the S&P 500 dropping 6 percent in that session.
Home Depot Inc
In the latest U.S. data, industrial output rose at its fastest pace in seven months in July, while July housing starts fell, reflecting a sector continuing to bounce along the bottom.
(Reporting by Caroline Valetkevitch, additional reporting by Rodrigo Campos; editing by Jeffrey Benkoe)