Major stock proxies sulked lower into the Christmas holiday, which was fitting, given that the fundamental backdrop didn't support Santa's appearance. The Dow Jones Industrial Average fell 0.5% to 8448.11, the S&P 500 shed 0.6% to 892.47, and the Nasdaq Composite lost 0.7% to 1372.51. U.S. financial markets closed early Tuesday in advance of Christmas Eve celebrations and Wednesday's holiday closure. In New York Stock Exchange trading, just 457 million shares were exchanged before the 1 p.m. EST close of trading. The half-session setback was largely attributable to a weaker-than-expected durable goods report for November. The Commerce Department reported orders for big-ticket items fell 1.4% last month vs. expectations for a 0.8% rise. Orders for nondefense capital goods, which exclude aircraft and other transportation equipment, fell 1.3% vs. expectations for a 0.2% rise and a 1.6% gain in October. The durable goods data, in conjunction with further confirmation of weak holiday sales for retailers, generated further concern about the strength of the recovery and prospects for fourth-quarter GDP. On the retail front, the Bank of Tokyo-Mitsubishi/UBS Warburg's same-store sales index rose 1.7% last week. However, Target ( TGT) said its same-store sales were "well below" forecast for a third straight week, while Ultimate Electronics ( ULTE) because the latest consumer electronics retailer to warn that results will not meet prior guidance. Target fell 1%, Ultimate tumbled 13.5%, and the S&P Retail Index shed 0.7%. The latest evidence of the economy's struggles to work through its so-called soft spot provided a boost to Treasuries. The price of the benchmark 10-year note rose 12/32 to 100 20/32, the yield falling to 3.92%. Conversely, the dollar suffered from the weak economic data and rising geopolitical unrest. In addition to ongoing concerns about potential war with Iraq and the strike in Venezuela, traders are now also focusing on the growing tensions between the U.S. and North Korea. Secretary of Defense Donald Rumsfeld said "we are capable of fighting two major regional conflicts" after North Korea warned of an "uncontrollable catastrophe" if the U.S. refuses to allow North Korea to continue pursuing its nuclear program.