NEW YORK (CNNMoney.com) -- Stocks slipped Tuesday, giving up earlier gains in a very choppy session amid a worse-than-expected existing home sales report and the latest on the European debt crisis.
Trading was volatile throughout Tuesday's session, with an early advance petering out after the release of the housing market report. But the tone turned decidedly negative in the last hour.
Oil company shares tumbled in the afternoon amid the continued fallout from the BP oil spill. A judge ruled to lift the six-month ban on deep water drilling instigated in the wake of the spill, but the Obama administration has vowed to appeal the lifting of the ban.
Worries that the economy could be heading into a so-called double-dip recession pummeled stocks for six weeks through early June, with the major indexes all losing close to 14%.
Since then, stocks have bounced back about 6%. But trading volume has been weak, reflecting both light summer activity and a lack of conviction on the part of buyers.
Although stocks could rise longer term, in the short run, there's little to reassure investors. "We're going to need a big catalyst to get things moving higher again," said John Wilson, chief technical strategist at Morgan Keegan.
Stocks initially rose Monday after China said it would let its currency rise versus the dollar, a move that could boost U.S. exports and manufacturing. But the market slipped by the close as the recent trend of last-hour volatility returned.
On the move: Declines were broad based, with 26 of 30 Dow stocks falling, led by Boeing (BA, Fortune 500), Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), IBM (IBM, Fortune 500) and Home Depot (HD, Fortune 500).
The transportation sector was hit hard, with truckers, railroads and airlines dragging down the Dow Jones Transportation Average (DJT) by 3.5%.
Among stock movers Tuesday, Apple (AAPL, Fortune 500) shares gained after confirming that it sold 3 million iPads in less than three months. Amazon.com (AMZN, Fortune 500) also bounced after sliding Monday on news that it was cutting the price of its Kindle e-reader to keep up with a competitive marketplace.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by over three to one on volume of 1.12 billion shares. On the Nasdaq, decliners topped advancers by over three to one on volume of 1.9 billion shares.
Economy: Existing home sales fell to a seasonally adjusted annual unit rate of 5.66 million in May, the National Association of Realtors reported. That was down from a 5.77 million unit rate in April and short of forecasts for a rise to 6.1 million units.
In other news, White House budget director Peter Orszag is planning to resign, an administration official told CNN. He'll leave in July.
Fed: Central bank policy makers are meeting Tuesday and Wednesday with an announcement expected Wednesday afternoon regarding interest rates and the economy.
Policymakers are widely expected to hold the fed funds rate, a key overnight bank lending rate, steady at historic lows near zero and to indicate that they will continue to do so for the foreseeable future.
Of more interest will be the statement and what the Fed says about the economic outlook, particularly amid concerns that the bankers have run out of ways to prop up the economy.
Euro: The euro fell modestly versus the dollar but remained well above the four-year low of $1.188 it hit last week. The dollar fell 0.5% versus the yen.
World markets: European markets slipped after Fitch Ratings downgraded French bank BNP Paribas and Standard & Poor's boosted its forecast on loan losses for Spain's banking sector.
But declines were limited by the U.K.'s announcement that it will cut expenses and initiate a new tax on banks as it attempts to get its deficit under control.
Britain's FTSE 100 lost 1%, Germany's DAX gave back 0.4% and France's CAC 40 fell 0.8%.
Asian markets were mixed. Japan's Nikkei fell 1.2%, Hong Kong's Hang Seng fell 0.5% and China's Shanghai Composite added 0.1%.
Commodities: U.S. light crude oil for July delivery fell 61 cents to settle at $77.21 a barrel on the expiration date of New York Mercantile Exchange trading. The August contract, which begins active trading Wednesday, settled down 76 cents at $77.85 a barrel.
COMEX gold for August delivery fell 20 cents to settle at $1,240.80 an ounce after closing at a record $1,258.30 on Friday.
Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.17% from 3.24% late Monday. Treasury prices and yields move in opposite directions.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.79%||3.82%|
|15 yr fixed||3.02%||3.02%|
|30 yr refi||3.87%||3.90%|
|15 yr refi||3.11%||3.11%|
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