Wall Street gets anxious about earnings

NEW YORK (CNNMoney.com) -- Stocks took a break Tuesday from their recent runup following some troubling earnings announcements from Sears and D.R. Horton, as Wall Street awaited remarks by Federal Reserve Chairman Ben Bernanke.

The 30-stock Dow Jones industrial average (down 33.49 to 13,616.48, Charts) fell about 0.3 percent. The broader S&P 500 (down 7.23 to 1,524.62, Charts) dipped nearly 0.5 percent while the tech-fueled Nasdaq (down 9.73 to 2,660.29, Charts) sank 0.4 percent.

The blue chip Dow and S&P 500 indexes just missed closing at record highs Monday.

Retailer Sears Holdings (down $13.83 to $157.58, Charts, Fortune 500) said it expects lower profit for the quarter, sending shares of the retailer down over 8 percent on the Nasdaq.

The nation's largest home builder, D.R. Horton, reported a 40 percent drop in new home orders last quarter and said it expected to post its first quarterly loss since 1995 in the third quarter. D.R. Horton (down $0.59 to $19.20, Charts, Fortune 500) shares slipped nearly 3 percent in morning trade.

Home improvement retailer Home Depot (up $0.42 to $40.65, Charts, Fortune 500) lowered its earnings outlook for the fiscal year early Tuesday, citing weaker conditions in the housing market. Shares of the Dow component edged higher on the New York Stock Exchange, despite the news.

"We had some earnings announcements that were disappointing with a market that had been levitating so you are getting a selloff," said James Awad, chairman at Awad Asset Management.

The Dow has finished higher in all but one session so far this month.

Investors are gearing up for the second quarter earnings reporting period, which starts in earnest this week. Right now Wall Street is betting on a slowdown in earnings after 14 consecutive quarters of double digit growth.

Market observers will be keeping a close eye on Federal Reserve chief Ben Bernanke, who is set to deliver a speech on inflation to the National Bureau of Economic Research in Cambridge, Mass., starting at 1 p.m. ET.

In corporate news, aluminum giant Alcoa extended its outstanding offer to acquire Canadian rival Alcan (down $0.89 to $86.06, Charts) Tuesday, just after posting a dip in quarterly profit that met forecasts after the market close Monday.

But the Times of London reported Tuesday that BHP Billiton, the world's largest miner, is in talks with private equity groups about a joint $40 billion bid for Alcoa.

Alcoa (down $0.12 to $42.24, Charts, Fortune 500) shares edged higher on the New York Stock Exchange.

Shares of Apple (up $3.41 to $133.74, Charts, Fortune 500) jumped over 2 percent following a report by a JP Morgan analyst that suggested the computer and consumer product maker plans to roll out a cheaper version of the recently released iPhone in the fourth quarter.

In economic news, the Commerce Department reported that inventories of unsold goods rose more than expected during the month of May.

Overseas, the dollar fell to a record low against the euro and eased versus the yen.

European stocks were mixed in late session trading, and major Asian markets edged lower but finished near record highs.

Treasury prices climbed ahead of Bernanke's speech, lowering the yield on the 10-year note to 5.08 percent from the 5.15 percent level reached late Monday.

Oil prices rose after Monday's rally, as U.S. light crude for August climbed 56 cents to $72.75 a barrel.

Market breadth was negative. Losers topped winners just over 2 to 1 on the New York Stock Exchange as 514 million shares changed hands. On the Nasdaq, decliners beat advancers by the same margin on volume of 806 million shares.