Stocks Dig Deeper Into the Red

As for economic data, the National Association of Realtors' existing-home sales report came in at an annualized rate of 5 million units in July, vs. 4.85 million in June and ahead of analyst expectations. Inventories, however, rose 3.9% to 4.67 million units, a record level, and home sales fell 13.2% year over year, and the median home price fell 7.1% from a year ago.

"The real issue with whether you're talking existing-home sales or new-home sales is the inventory overhang," says Johnson Illington's Hugh Johnson. He pointed out that the inventory overhang remains high. "Until that comes down, we're not going to see any relief from the downward pressure on prices."

Longer-dated U.S. Treasury securities were gaining value. The 10-year was up 25/32 to yield 3.78%, and the 30-year was tacking on 1-12/32, yielding 4.38%. The dollar was softening against its major foreign competitors.

Overseas, European exchanges were mixed, while Asia posted gains. The FTSE in London was gaining substantially, and the Dax in Frankfurt was losing ground. Japan's Nikkei and the Hang Seng in Hong Kong were both trading higher.