Stocks fell on Tuesday after a disappointing outlook from 3M Co and a second straight month of falling domestic sales at McDonald's Corp triggered concern about consumer spending.

Equities also faced pressure from a climb in the U.S. dollar as investors sought safety from risk amid worries about Dubai's unresolved debt problems.

As the dollar rose, commodities, including oil and gold, fell.

Diversified manufacturer 3M fell 1 percent to $77.16 after it gave a 2009 outlook that fell short of Wall Street's consensus and provided investors with a cautious initial view of its 2010 earnings.

Shares of McDonald's shed 1.9 percent to $60.73 after the world's largest hamburger chain said sales at its established U.S. restaurants dipped in November as competitors pushed low prices to attract customers.

They are all squeezing margin, said Cummins Catherwood, managing director at Boenning and Scattergood in West Conshohocken, Pennsylvania.

I haven't seen much revenue improvement anywhere and until we get there, you can't become a believer.

The Dow Jones industrial average <.DJI> dropped 92.66 points, or 0.89 percent, to 10,297.45. The Standard & Poor's 500 Index <.SPX> fell 8.98 points, or 0.81 percent, to 1,094.27. The Nasdaq Composite Index <.IXIC> shed 8.81 points, or 0.40 percent, to 2,180.80.

The disappointing views overshadowed optimism late Monday from FedEx Corp , which gained 3 percent to $90.15, after forecasting second-quarter earnings would easily beat analysts' estimates.

In another sign of weak consumer spending, supermarket operator Kroger Co reported quarterly results far below expectations and cut its full-year forecast.

Kroger shares slumped 10.3 percent to $20.50 while the S&P Consumer Staples index <.GSPS> slipped 1.1 percent.

The greenback <.DXY> rose 0.4 percent against a basket of six other major currencies.

President Barack Obama's announcement of measures to create more jobs in the struggling recovery had little immediate impact on stocks. Obama proposed small business tax cuts, fresh infrastructure spending and energy efficiency rebates.

(Editing by Kenneth Barry)