Economic Data Weigh on Stocks

Updated from 1:37 p.m. EDT

Stocks in the U.S. continued to churn in murky action Tuesday as traders digested home-sales data that was as bad as expected, encouraging consumer confidence reports and hawkish notes from an August Fed meeting.

Lately, however, the major indices were slumping lower. The Dow Jones Industrial Average was down 34 points at 11,352, and the S&P 500 lost 2.8 points to 1,264. The Nasdaq was shedding 18 points at 2,348.

Investors continued to wring their hands over the previous day's reports of a potential takeout of Lehman Brothers (LEH Quote), whose exposure to bad credit has left its stock on the ropes and management facing questions about its strategy. ...