Updated from 4:09 p.m. EDT

Sellers moved in Tuesday, sending stocks to a lower close, and the Dow Jones Industrial Average finished with a triple-digit loss as most every sector of the market was weaker.

The Dow ended with a loss of 118.72 points, or 1.3%, to 8872.07. The Nasdaq fell 17.95 points, or 1.3%, to 1376.59, and the S&P 500 was off 13.27 points, or 1.4%, to 937.43.

Among sectors, biotech stocks, precious metals companies and utilities posted slight gains. The rest of the market contended with selling pressure. Only three of the 30 Dow components were higher: AT&T ( T), General Motors ( GM) and Home Depot ( HD).

As for individual stocks, Qwest ( Q) rose 32% to $2.95 after the company reached an agreement to sell its directories business for $7 billion.

Home Depot beat earnings estimates by 3 cents, helping lift its shares 4% to $30.25. AT&T gained almost 4% to $11.18 after J.P. Morgan upgraded the stock and a report circulated that AOL Time Warner ( AOL) is preparing to buy out the company's stake in Time Warner Entertainment for $9 billion in cash and stock.

Meanwhile, the Securities and Exchange Commission approved certification of AOL's financial statements after initially withholding judgment on them and several others. Regulators did the same for Bristol-Myers ( BMY) and Reliant Energy ( REI).

The Wall Street Journal reported that Deutsche Telekom's ( DT) VoiceStream unit has proposed merging with Cingular, a venture of SBC Communications ( SBC) and BellSouth ( BLS).

Cingular would be the controlling shareholder after the proposed transaction. Stocks in the wireless sector were mixed in the wake of the report.

Elsewhere, UBS Warburg downgraded the regional Bell companies to hold from buy, citing potential margin pressure from the upcoming unbundled network element platform.

On the economic front, the government said the June trade gap came in at $37.2 billion, slightly narrower than the $37.4 billion consensus.

Treasury prices were stronger around 4 p.m. EDT, with the 10-year note gaining 1 5/32 to 101 28/32 and yielding 4.143%. The 30-year bond was up 1 11/32 to 106 5/32 with a yield of 4.968%.

Overseas shares were mixed. London's FTSE 100 was off 1.3% to 4369, and Germany's Xetra DAX fell 1.8% to 3769. In Asia, Japan's Nikkei rose 0.2% to 9621, while Hong Kong's Hang Seng added 1.6% to 10,408.