The Dow Jones industrial average lost 101.37 points to close at 13,457.55. Caterpillar tugged the Dow down, losing 4 percent. The world's largest maker of bulldozers and other heavy equipment said late Monday that slower economic growth around the world dampened its earnings forecast. Its stock sank $3.86 to $87.01.
The Nasdaq composite index dropped 43.05 points to 3,117.73. Google's stock touched an all-time high in early trading, clearing $764, but closed the trading day at $749.16.
A batch of encouraging economic reports gave the stock market a nudge in morning trading. House prices rose in major cities for a third straight month, and a gauge of consumer confidence came in surprisingly high.
More surprising than those two economic reports was the Richmond Federal Reserve's strong reading on regional manufacturing, a recent trouble spot, said Phil Orlando, chief equity strategist at Federated Investors. Apple, the largest public company in the world, lost $17.25, or 2.5 percent, to close at $673.54. It has lost more than $26 in two days. Apple is the biggest component in the S&P but is not included in the Dow, helping explain why the S&P suffered a greater percentage decline than the Dow's 0.8 percent.
The closely watched Standard & Poor's/Case Shiller index of national house prices increased 1.2 percent in July compared with the same month in 2011. Prices rose from the previous month in all 20 major cities tracked by the report for the third month in a row.
The Conference Board said its gauge of consumer confidence shot to a seven-month high in September, trumping forecasts by a large margin. People surveyed said they were more optimistic about the job market. The Federal Reserve's manufacturing index, which surveys companies in the central Atlantic region, increased after shrinking for three months as businesses turned more optimistic. Companies said they anticipate more orders and shipments even as employment dips. The index turned positive in September after a negative reading in August.
All three major stock indexes have surged or more this month, buoyed by a new plan from the Federal Reserve to support the U.S. economy.