Stocks Slip; Earnings Bar Rises

(Updated with stock and commodity prices.)

NEW YORK (TheStreet) -- The major averages declined Tuesday despite a handful of better than expected earnings reports. Wall Street apparently has raised the bar for earnings, and economic data disappointed.

Immediately after the close, Yahoo!(YHOO Quote) and SanDisk(YHOO Quote) reported better than expected results, sending the stocks higher in afterhours trading.

But after reports from five of its components, including better than expected releases from Caterpillar and Pfizer, the Dow Jones Industrial Average ultimately fell 50.71 points, or 0.5%, to 10,041.48 in the regular session. The S&P 500 gave up 6.85 points, or 0.6%, to 1,091.06, and the Nasdaq shed 12.85 points, or 0.6%, to 2,163.47.

"It's just a little bit of digestion of the gains that we've had over the last two weeks," says Bill Stone, chief market strategist at PNC Wealth Management. "We were up about 7% in a little over two weeks, and it was based on the fact that at least early on it seemed to be indicated that earnings would be better than expected -- but at some point that gets priced in."

Stocks came under early pressure as new building permits, fell unexpectedly and housing starts increased by 20,000 less than expected.

Permits fell to 573,000 from 580,000, vs. expectations for an increase to 595,000. Housing starts increased by 3,000 to 590,000.

"[The housing data] are not as impressive as we had really hoped for," says Hugh Johnson, CIO of Johnson Illington Advisors. "So what it all says is 'look folks, yes the economy may be recovering, and yes the housing sector of the economy may be recovering, but the truth is that it's not recovering as robustly and as strongly as we expected.'"