Dow Loses 149 Points

Stocks stumble late Tuesday as the market digested an unexpected dip in May existing-home sales and looked ahead to the Fed's statement.
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NEW YORK (

TheStreet

) -- A deep stock slide Tuesday afternoon obliterated what had been a fairly directionless morning session by the closing bell, as investors reassessed global growth prospects following a downbeat report on the U.S. housing market and after eurozone concerns resurfaced.

The

Dow Jones Industrial Average

tumbled 149 points, or 1.4%, to finish at 10,294. The

S&P 500

lost 18 points, or 1.6%, to 1095, and the

Nasdaq

slid 27 points, or 1.2%, at 2262.

Market participants are also eagerly awaiting Wednesday's rate decision from the

Federal Reserve's

rate-setting committee. Aaron Kennon, chief executive officer of Clear Harbor Asset Management, echoed widespread sentiment that rates will remain unchanged for at least the remainder of the year and said he doesn't think the Fed will make any significant changes to the tone of its statement.

"I don't think that it behooves the Fed to talk down the market. They'll probably be somewhat balanced in their comments," he said. "That's the challenge that the Fed is currently facing. A double-dip recession is back on the table. Here at Clear Harbor, we don't think it's a probability, but it's certainly back on the table."

Late Monday, Fitch lowered its debt rating on the eurozone's largest bank by deposits,

BNP Paribas

, by one notch and cut its long-term rating to AA- from AA, citing deteriorating asset quality.

Overseas on Tuesday, Hong Kong's Hang Seng slipped by 0.5%, and Japan's Nikkei lost 1.2%. The FTSE in London was shed 1%, and the DAX in Frankfurt fell 0.4%.

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The Economy

Economic news centered on the housing market Tuesday as the National Association of Realtors said May

existing-home sales unexpectedly fell 2.2% to 5.66 million from 5.79 million previously. April's level was upwardly revised from 5.77 million. Economists had been expecting stronger sales of 6.1 million in May, according to Briefing.com.

At the same time, the Federal Housing Finance Agency's housing price index for April rose 0.8%, up from the prior month's uptick of 0.3%.

The

SPDR S&P Homebuilders ETF

(XHB) - Get Report

was shedding 7 cents, or 0.5%, at $15.54.

Meanwhile, the Richmond Fed Index came in at 23 in June, which was lower than May's reading of 26.

In the afternoon, a federal district court judge ruled against the White House's decision to place a

six-month ban on deepwater drilling following the

BP

(BP) - Get Report

oil spill in the Gulf.

On Tuesday, the Federal Open Market Committee opens a two-day meeting to discuss monetary policy. The meeting will culminate with a rate decision announcement on Wednesday afternoon.

After the close of trading, the American Petroleum Institute said crude inventories experienced a surprise build last week, growing by 3.69 million barrels ahead of the Energy Information Administration's report on Wednesday, according to

Bloomberg.

Analysts polled by Platts expected oil supplies to decline by 1.5 million barrels in the week ended June 18.

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Company News

Health care stocks showed the strongest gains of the session on the Dow, as

Johnson & Johnson

(JNJ) - Get Report

and

Merck

(MRK) - Get Report

were the only two advancers on the blue-chip average.

But

Alcoa

(AA) - Get Report

,

Caterpillar

(AA) - Get Report

, and

Home Depot

(HD) - Get Report

were the biggest laggards on the Dow.

Johnson & Johnson subsidiary Ortho-McNeil-Janssen Pharmaceuticals signed an agreement to pay Stockholm-based

Diamyd Medical

$45 million to collaborate on developing and globally commercializing type-1 diabetes treatment and prevention.

Apple

(AAPL) - Get Report

Chief Executive Steve Jobs said 3 million iPads have been sold in 80 days since its debut.

Walgreen

(WAG)

reported a lower-than-expected adjusted profit of 47 cents.

Intel

(INTC) - Get Report

and the Federal Trade Commission signaled they may soon reach an out-of-court settlement of their antitrust case, according to a

Financial Times

report.

Aegon

(AEG) - Get Report

said it's exploring options for its Transamerica life reinsurance unit in the U.S. and has plans to restructure the business' U.K. operations.

After the bell,

Adobe Systems

(ADBE) - Get Report

said its second-quarter profit bettered consensus estimates by a penny, earning an adjusted 44 cents a share on rising revenues.

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>>The Economy

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Commodities and the Dollar

Crude oil for July delivery settled down by 61 cents to finish at $77.21 a barrel.

Elsewhere in commodity markets, the August

gold contract traded 10 cents higher to settle at $1,240.80 an ounce.

The dollar was trading higher against a basket of currencies, with the

dollar index up by 0.1%.

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>>The Economy

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>>Treasuries

Treasuries

The benchmark 10-year Treasury was up 24/32, diluting the yield to 3.159%.

The two-year note was up 2/32, pressing the yield down to 0.681%. The 30-year bond was up 1 9/32, dropping the yield to 4.093%.

--Written by Melinda Peer and Sung Moss in New York

.

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