Economic fear, Thai turmoil spook stocks

NEW YORK (CNNMoney.com) -- Stocks fell early Tuesday after a jump in prices paid by businesses raised jitters about inflation.

The Dow Jones industrial average (Charts) fell about 0.3 percent and the broader S&P 500 index (Charts) tumbled 0.5 percent after the market open.

The tech-fueled Nasdaq composite (Charts) sank 1 percent amid disappointing earnings from software maker Oracle.

Two economic reports released before the opening bell dampened sentiment in a market already pressured by a selloff in Asia.

The Labor Department's Producer Price Index jumped a larger-than-expected 2 percent in November. The measure of prices paid by businesses posted their biggest gain since 1974.

Core PPI , which strips out volatile food and gasoline prices , rose 1.3 percent, spurring inflation worries.

A separate government report on homebuilding showed activity rebounded in November at a pace that exceeded Wall Street's expectations. (Full story)

Builders started work on homes at an annual pace of 1.59 million in November, up from the 1.49 million rate in October, which had been the lowest reading since July 2000.

Sentiment was also pressured by Asian markets, which ended the session sharply lower after the Thai central bank placed limits on foreign investment. Thai stocks plummeted 13 percent while major markets in Japan and Hong Kong fell more than 1 percent.

Among stock movers, Circuit City (Charts) sank 16 percent after it posted a quarterly loss. Analysts had expected the electronics retailer to report a profit.

Shares of software maker Oracle (Charts) tumbled 5 percent. The company reported earnings in line with Wall Street's estimates late Monday, but some investors had expected even better results.

Homebuilder Hovnanian Enterprises (Charts) reported a loss for its latest quarter late Monday and issued a full-year outlook that fell sharply below forecasts. Shares of the builder fell 4 percent.

Oil prices fell in early trading on continued mild weather in the Northeast, the region of the country that makes the greatest use of home heating oil. U.S. crude light crude for January delivery lost 37 cents to $61.84 a barrel in electronic trading.

Treasury prices dipped, raising the yield on the benchmark 10-year note to 4.59 percent from 4.58 percent late Monday. Bond prices and yields move in opposite directions.

The dollar drifted lower against the euro and the yen.

In global trade, Asian markets finished the session lower and major stock indexes in Europe fell in early afternoon trading.

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