Updated from 4:03 p.m. EST

Stocks closed lower Tuesday as weakness in the homebuilding sector, brought on by cautious comments from

Toll Brothers

(TOL) - Get Report

, took some of the air out of a two-week-old rally.

The

Dow Jones Industrial Average

fell 46.51 points, or 0.44%, to 10,539.72. The

S&P 500

lost 4.22 points, or 0.35%, to 1218.59. The

Nasdaq

shed 6.17 points, or 0.28%, to 2172.07. The 10-year Treasury rose 16/32 in price to yield 4.56%, while the dollar was higher against the yen and euro.

"If the market was looking for a catalyst or reason to move lower, it was the homebuilders today," said Art Hogan, chief market analyst with Jefferies. "We still have to digest all these gains. We need more good news than we're getting to maintain this level."

About 1.41 billion shares traded on the

New York Stock Exchange

, with decliners beating advancers by a 5-to-3 margin. Trading volume on the Nasdaq was 1.62 billion shares, with three stocks falling for every two that rose.

Thus far in November, the Nasdaq has gained 2.44%, while the S&P 500 is up 0.96%. The Dow has added 0.95%.

"The seasonal year-end rally started a week ago in my opinion," said Al Goldman, chief market strategist A.G. Edwards. "October was no fun at all and gave us an oversold condition. Coming into November we had a lot of pent-up demand. This will be crucial for November and December."

The dollar's strength followed appeals to the European Central Bank to hold off on interest rate hikes while authorities work to contain civil unrest in and around Paris. Officials are concerned that the rioting, which has led to more than 1,500 arrests over two weeks, will spread to neighboring countries such as Germany.

Oil was higher but still remained under the $60 level, with December crude finishing up 24 cents to $59.71 a barrel. The contract lost more than a dollar on Monday as warm weather across much of the U.S. kept a lid on heating oil demand. Gasoline futures rose 1 cent to $1.56 a gallon and natural gas was down 8 cents to $11.79 per million British thermal units.

After crude prices reversed early and closed higher, both the Philadelphia Oil Service Sector Index and the Amex Oil Index finished up 0.8%.

Sunoco

(SUN) - Get Report

added 2.2%, and

ConocoPhillips

(COP) - Get Report

was up 1.3%.

"We'll have to keep a sharper eye on oil as we're remaining below $60," Hogan said. "It's going to take a lot more tomorrow to move the needle."

The session started to the downside after Toll Brothers warned that earnings and home deliveries in 2006 will fall short of its previous forecasts because of regulatory delays and other factors. The company, which reported a 39% gain in fourth-quarter homebuilding revenue, was also cautious about pricing trends.

"It appears we may be entering a period of more moderate home price increases, more typical of the past decade than the past two years," Toll said.

Toll Brothers tumbled $5.50, or 14%, to close at $33.91. Other homebuilders finished lower as well, with

KB Home

(KBH) - Get Report

down 5.5%,

Hovnanian

(HOV) - Get Report

losing 7.1% and

Ryland

(RYL)

lower by 4.9%.

"The market may be short-term extended but has handled the pull-back well," Goldman said. "We were due for some profit-taking, and Toll Brothers was our excuse, but technology has held up well."

The Philadelphia Semiconductor Sector Index finished lower, down 0.2%. However, over the past seven sessions, the index has added 6.5%. On Tuesday,

Applied Materials

(AMAT) - Get Report

was the best-performing component, adding 2.2%, while

Infineon Technology

( IFX) was the main laggard, down 1.6%.

Dow component

McDonald's

(MCD) - Get Report

said Tuesday that same-store sales rose 3.4% during October, reflecting a 3% gain in the U.S. and a 3.3% rise in Europe. The company attributed the increase in same-store sales to a Monopoly game promotion. The stock was higher by 30 cents, or 0.9%, to close at $34.

In earnings news, satellite television provider

EchoStar

(DISH) - Get Report

said third-quarter earnings more than doubled to $209 million, or 46 cents a share, beating estimates by 5 cents. Revenue rose 14% from a year ago to $2.1 billion. EchoStar fell by 64 cents, or 2.4%, to $26.28.

Teva Pharmaceuticals

(TEVA) - Get Report

posted third-quarter earnings $267.1 million, or 40 cents a share, up 6% from a year ago. Sales also rose 6% to $1.32 billion. The Thomson First Call average consensus was for EPS of 38 cents. Shares of Teva rose 64 cents, or 1.7%, to $38.99.

Blockbuster

( BBI) posted a third-quarter loss of $491.4 million, or $2.67 a share, improving from a loss of $1.41 billion, or $7.81 a share, a year earlier. Revenue slipped to $1.39 billion from $1.40 billion last year. On an adjusted basis, the video rental company had a loss of 13 cents a share, matching the Thomson First Call consensus. Blockbuster lost 10 cents, or 2.3%, to $4.20.

Visteon

(VC) - Get Report

reported a third-quarter loss of $200 million, or $1.58 a share, narrowing from $1.44 billion, or $11.48 a share, a year ago. Revenue dipped 0.4% from last year to $4.12 billion. The Thomson First Call consensus was for a loss of $1.34 a share on revenue of $4.24 billion.

The auto parts maker also said it expects a near $1.8 billion gain in the fourth quarter when it tranfers 23 facilities to

Ford

(F) - Get Report

. However, revenue in the fourth quarter is expected to fall by 40%. Visteon dropped $1.26, or 14%, to close at $7.72.

Shares of

International Paper

(IP) - Get Report

finished lower after the company revised its third-quarter earnings report lower because of a change in income tax provision. The company said it earned $1.02 billion, or $2.03 a share, in the quarter, compared with the original earnings release that said the company earned $1.04 billion, or $2.07 a share. International Paper was down 29 cents, or 1%, to $29.52.

Television networks CBS and NBC reportedly have reached a deal with cable and satellite companies under which they will sell popular television shows on an a la carte basis to subscribers.

The

Viacom

(VIA) - Get Report

and

General Electric

(GE) - Get Report

units reached deals with

Comcast

(CMCSA) - Get Report

and

DirecTV

(DTV)

, according to the

Wall Street Journal

.

Among ratings moves, Bank of America upgraded

Guidant

( GDT) to buy from neutral but decreased its price target to $66 from $69. Guidant slid 99 cents, or 1.7%, to $56.53.

Overseas markets were mixed, with London's FTSE 100 unchanged at 5461 and Germany's Xetra DAX down 0.3% at 5009. In Asia, Japan's Nikkei fell 0.2% overnight to 14,037, while Hong Kong's Hang Seng added 0.2% to 14,403.