Updated from 4:04 p.m.

Stocks ended weaker in Tuesday's shortened Christmas Eve trading session, as investors mulled the implications of Sun Microsystems' ( SUNW) tentative antitrust victory over Microsoft ( MSFT) regarding Sun's Java programming language.

The Dow Jones Industrial Average fell 45 points, or 0.5%, to 8448.11, while the Nasdaq dropped 9 points, or 0.7%, to 1372.51. The S&P 500 fell 4 points, or 0.6%, to 892.47. Tuesday's lackluster performance keeps the Dow's December slide at roughly 5%, which would make this the worst December in more than two decades.

Markets were digesting the latest economic data and retail sales figures, both of which were weaker than expected. The Commerce Department said durable-goods orders for November fell 1.4%, reversing a 2.4% gain in October and coming in below economists' consensus estimate of a 0.8% gain.

Meanwhile, Sun announced after the close Monday that a federal judge issued a preliminary injunction ordering Microsoft to distribute the rival Java programming language in its Windows operating system. The injunction will remain in place until the two sides have the opportunity to present their cases at trial. Sun was a big winner, gaining 5.7% to $3.13.

Overall, the session was extremely quiet, with the major market indices trending close to Monday's close on extremely thin volume. Few sectors stood out, with technology trending mildly to the upside, led by semiconductors and computer hardware. Wireless, healthcare and oil service stocks were leading to the downside.

Discount retailer Target ( TGT) said same-store sales came in well short of expectations for the third straight week, providing further evidence of a lackluster holiday shopping season. Indeed, the National Retail Traffic data show that December sales are currently off 5.8% from last year's levels. Target, which had been getting hit along with the rest of the retailers, was off 1.3% to $28.17.

The combination of poor economic news, slow seasonal sales and equity weakness has bolstered the case for Treasuries and other defensive investments, which have been rallying. The 10-year note gained 12/32, lowering its yield to 3.92%. The 30-year bond gained 14/32, dropping its yield to 4.87%. Gold futures on the New York Mercantile Exchange gained $1.20 to $346.80.

The carnage in the video game sector continues as Midway Games ( MWY) warned that it would post a fourth-quarter loss due to weaker-than-expected holiday sales. The company expects sales of $78 million to $83 million, compared with the company's previous revenue guidance of between $105 million to $155 million. Wall Street analysts were expecting the company to earn 27 cents a share on revenue of $111.25 million, according to Thomson Financial/First Call. Midway, best known for its Mortal Kombat series, was off 7.7% to $3.96.

Unlike previous sessions, the bad news didn't trigger sympathy selling in rivals, who have been battered by investors as companies keep lowering sales estimates. Bargain-hunters lifted THQ ( THQI) 2.8% to $12.56.

Elsewhere in the retail sector, Ultimate Electronics ( ULTE) slashed its fourth-quarter profit forecast, citing weak holiday sales of its big-ticket items. While the move isn't surprising, coming on the heels of similar warnings from rivals like Tweeter ( TWTR) and Circuit City ( CC), Ultimate Electronics dropped 14.2% to $9.48.

Theme-park operator and media giant Disney ( DIS) said it will take $83 million charge in the first quarter in order to write off its UAL ( UAL) aircraft lease investment. Disney, which had been falling due to Treasure Planet's costly box office flop, lost 1.3% to $16.41.

In the airline industry, China Airlines, Taiwan's largest carrier, said on Tuesday it has inked deals with Boeing ( BA) and Europe's Airbus SAS to buy 22 large aircraft for $3 billion. The contract provided some much-needed good news for Boeing, which has been losing business as the U.S. carriers have delayed orders. Boeing dipped 0.2% to $32.72.

Overseas markets were mixed, with London's FTSE 100 ending up 0.1% to 3942. Japan's Nikkei 225 rose 1.3% to 8512, while Hong Kong's Hang Seng shed a point to 3032. German markets were closed for the holiday.