Stocks fell in a volatile session Tuesday, following Monday's strong gains, as investors responded to mixed corporate profits and weak U.S. economic reports. Stocks fell sharply in the morning, posted gains in the early afternoon, and finished moderately lower. Better-than-expected corporate profits helped stocks gain 7 percent in July, which was the best month for stocks in a year. At the same time, however, a series of disappointing economic reports has raised worries about the slowing pace of the recovery. In U.S. economic news, consumer spending and income were unchanged in June, adding to concerns about the slowing recovery. Pending home sales fell 2.6 percent in June to the lowest level on record. A third report showed factory orders falling for the second consecutive month in June. Economists are closely watching consumer spending, which accounts for most U.S. economic activity, as growth in the second quarter slowed. They also are waiting for Friday's U.S. employment report, which is expected to show that employers cut payrolls in July and that the unemployment rate rose slightly. U.S. Treasury Secretary Timothy Geithner said Tuesday that the country's unemployment rate could rise for a few months before it falls. The U.S. dollar fell versus the euro and the yen. Light sweet crude oil for September delivery rose $1.16 to $82.49 a barrel on the New York Mercantile Exchange. Gold rose $2.10 to $1,187.50 per ounce. The Dow Jones industrial average fell 38.00, or 0.4 percent, to 10,636.38. Procter & Gamble reported that quarterly profit fell 12 percent from a year ago, and its shares fell almost 4 percent. Pfizer posted second-quarter profit and revenue that beat estimates, and the drugmaker's shares jumped 5.6 percent. ExxonMobil and Chevron each rose more than 1 percent as oil prices closed above $82 a barrel and BP (British Petroleum) seemed poised to permanently seal the ruptured well in the Gulf of Mexico. The broader Standard & Poor's 500 index fell 5.40, or 0.5 percent, to 1,120.46. The technology-heavy Nasdaq composite index fell 11.84, or 0.5 percent, to 2,283.52.
