Disappointing earnings from electronics retailer Best Buy sent stocks falling Tuesday as investors feared that lackluster consumer spending heading into the holiday season would weaken the overall economy.
Best Buy's profit, which rose 25 percent from a year earlier, missed Wall Street's forecasts. The company also said the current quarter also would miss targets, heightening investors' concerns that high gasoline and heating oil prices will hurt consumers.
A rise in the price crude oil also pressured stocks.
The retail news overshadowed a slightly better-than-expected report on producer price inflation.
"You have some good economic data, but I think everyone is still trying to figure out what the post-Hurricane Katrina environment is like," said Joseph Battipaglia, chief investment officer at Ryan Beck & Co. "For now, the fundamentals look strong, but that could change in the next few months as the distortions caused by Katrina come through in the economic data, and that's what has people holding off."
The Dow Jones industrial average fell 85.50, or 0.8 percent, to 10,597.44.
Broader stock indicators also lost ground. The Standard & Poor's 500-stock index dropped 9.36, or 0.75 percent, to 1231.20, and the Nasdaq composite index slid 11.08, or 0.51 percent, to 2171.75.
The results from Best Buy, the nation's largest electronics retailer and a Wall Street favorite, cast a pall on the markets.
"It's hard to blame everything on just one company, but Best Buy's earnings, and some disappointing commentary from the company, really got people questioning the impact of oil on consumer spending," said Jeffrey N. Kleintop, chief investment strategist for PNC Financial Services Group.
Best Buy fell $5.57, to $44.79; Circuit City Stores lost 46 cents, to $16.46; RadioShack dropped 53 cents, to $25.68.
EBay fell 66 cents, to $38.28, after CIBC World Markets predicted short-term problems working Internet phone company Skype into its business.
New York Stock Exchange composite index fell 59.26, to 7578.25.
American Stock Exchange index fell 10.62, to 1690.33.
Russell 2000 index of smaller-company stocks fell 7.69, to 673.13.
NYSE: 2.08 billion shares, up from 1.93 billion on Monday. Decliners outnumbered advancers 9 to 4.
Nasdaq: 1.76 billion shares, up from 1.74 billion. Decliners outnumbered advancers 2 to 1.
Crude oil for October delivery: $63.11, down 23 cents.
Gold for current delivery: $446.10 a troy ounce, down from $449.70 on Monday.