Earnings news grinds Wall Street rally to a halt

The stock market put its big rally on hold Tuesday after disappointing earnings and economic reports reminded investors of the obstacles still facing the economy.

Investors were unhappy with just about every major earnings or economic report Tuesday. Procter & Gamble Co. and Dow Chemical Co. reported earnings and revenue that fell short of forecasts.

Consumer spending and income figures showed that people are still very cautious with their money. Factory orders fell in June, as did the number of homes that were under contract to be sold.

The stream of bad news was a reminder that the recovery is going to be bumpy and slow.

Traders are also uneasy ahead of the Labor Department's July employment report due out Friday. Consumers are not expected to significantly increase their spending until they feel more secure about their jobs.

Dan Cook, a Chicago-based senior market analyst with the brokerage firm IG Markets, said many traders stayed out of the market while they waited for the employment report.

"These severely choppy markets are scaring individual investors," he said. "There's no way we can get them back in the game without getting the employment numbers up."

The Dow Jones industrial average fell 38.00 points, or 0.4 percent, to 10,636.38. The Standard & Poor's 500 index fell 5.40, or 0.5 percent, to 1,120.46, while the Nasdaq composite index fell 11.84, or 0.5 percent, to 2,283.52. - AP