US Stocks

U.S. stocks stumbled for a third day in a row as weak economic data and a negative outlook from Hewlett-Packard heightened fears about a slowdown in the global economic recovery. The Dow Jones Industrial Average fell 68.79 points, or 0.55%, to 12479.58, the blue chip index's fourth decline in five sessions. The Standard & Poor's 500-stock index shed 0.49 point, or 0.04%, to 1328.98, while the Nasdaq Composite edged up 0.90 point, or 0.03%, to 2783.21.

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Spooking investors was a drop in U.S. manufacturing production in April, the first decline in nearly a year, as natural disasters in Japan disrupted the auto industry. The drop in manufacturing weighed on overall U.S. industrial production, which was unchanged last month despite gains in mining and utilities output, the Federal Reserve said. Additionally, U.S. home construction fell unexpectedly in April, an indication that the troubled sector will remain a drag on the economic recovery. The Dow managed to recover some of its steep losses in intraday trading. After being down by as much as 170 points, the measure bounced back amid a reversal in commodities prices, which spent much of the morning deep in negative territory.

Materials, industrials and energy companies were the hardest-hit stocks on the day. Caterpillar sank $4.01 a share, or 3.8%, to $102.08 a share, Alcoa dropped 47 cents, or 2.8%, to 16.45, 3M shed 1.60, or 1.7%, to 93.86 and Chevron fell 46 cents, or 0.5%, to 100.41. H-P shares were down more than 8% after Chief Executive Leo Apotheker warned of tougher times in the current quarter. He said the company will have to cut back expenses and slow hiring plans, which spooked investors and weighed generally on the tech sector. H-P plunged 2.89, or 7.3%, to 36.91 to lead the Dow lower. Wal-Mart Stores' fiscal first-quarter profit rose 3% as international sales strength continued to drive the top line. Shares fell 52 cents, or 0.9%, to 55.54.

Reporting after the market close, personal-computer maker Dell said its profit totaled $945 million, or 49 cents a share, in the first quarter, up from $341 million, or 17 cents a share, a year earlier. Excluding acquisition-related charges and other impacts, adjusted earnings rose to 55 cents a share from 30 cents. Analysts polled by Thomson Reuters expected 44 cents a share. Revenue grew 1% to $15.02 billion. Shares of Dell closed down 0.6% at $15.90 and were halted ahead of the results.

European Stocks

European stocks fell sharply Tuesday as weak economic data and continued uncertainty over a potential restructuring of Greek debt weighed on sentiment. The Stoxx Europe 600 index dropped 1% to close at 277.28. The German DAX 30 index was the weakest of the main European markets, falling 1.8% to close at 7,256.65. Shares of ThyssenKrupp AG dropped 3.7% after Societe Generale downgraded the steelmaker to hold from buy.

Chemical producer BASF SE fell 3.1%, while shares of Infineon Technologies AG were down 3.9%. The falls for German stocks came after the ZEW indicator of economic sentiment slipped to 3.1 in May from 7.6 in April. German stocks were hit the hardest, because they have generated the strongest returns in recent months. Concerns over debt levels in the U.S. and the euro zone also soured sentiment. Peripheral markets were some of the stronger performers in Europe after European finance ministers late Monday approved a EUR78 billion bailout package for Portugal.

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Meanwhile, Luxembourg Prime Minister Jean-Claude Juncker said Monday that a "reprofiling" of Greek debt may be an option. Portugal's PSI 20 index slipped 0.2% to 7,730.58, with Banco BPI SA up 1.2%. Spain's IBEX 35 index fell 0.6% to 10,306.4, while the Greek ASE Composite ended a volatile session up 1.3%. In France, the CAC 40 index dropped 1.2% to 3,941.58.

Shares in French conglomerate Bouygues SA fell 3.4% after it reported an 81% drop in net profit late Monday. French retailer Carrefour SA rose 0.4% and was the strongest performer on the CAC index after it confirmed guidance for 2011. In London, the FTSE 100 index fell 1.1% to close at 5,861, as shares of silver miner Fresnillo PLC dropped 3.2%. In the technology sector, ARM Holdings PLC was down 4.6%.

Asian Markets

Asian shares were mixed Tuesday, with many of the region's benchmark indexes emerging from choppy sessions with losses or only modest gains. Investors remained wary after Wall Street extended losses Monday, and as European policymakers continued to debate how to help debt-stricken Greece.

China's Shanghai Composite Index erased sharp early losses to finish 0.1% higher at 2852.77. Japan's Nikkei Stock Average also bounced off the day's lows to end up 0.1% at 9567.02. Hong Kong's Hang Seng Index lost 0.3% to 22901.08 and South Korea's Kospi slipped 0.1% to 2102.41. Taiwan's Taiex slid 0.3% to 8884.09, while the main Philippine index dropped 0.9% to 4261.60.

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Stock markets in Singapore, Malaysia, Indonesia and Thailand were closed for holidays. Resource sector stocks aided a sharp rebound from initial losses in Shanghai as investors there snapped up coal shares and some other materials stocks. Analysts at Credit Suisse maintained their overweight stance on the market, which they noted was among the worst performing since 2010 despite the country's better fundamentals and growth outlook. China Coal Energy rose 2.1% and Datong Coal Industry climbed 4.3% in Shanghai; in Hong Kong, China Coal climbed 0.9%.

In Tokyo, the market clinched a small gain despite heavy losses in shares of utilities after Moody's Investors Service Monday cut Tokyo Electric Power debt rating to one notch above junk grade, its third downgrade of the company since the March 11 earthquake and tsunami crippled the Fukushima Daiichi nuclear plant. Tepco shares tumbled 9.5% and Chubu Electric Power lost 5.5%. Gains for some exporters, aided by a weakened yen, lifted the market in afternoon trading. Sony rose 1.5% and Sharp advanced 2.1%. South Korean shares ended lower following news that Goldman Sachs had revised down its rating on the South Korean market. Samsung Electronics dropped 1.2% and Hynix Semiconductor skidded 3.8%.

Base Metals

Base metals limped to a negative close on the London Metal Exchange Tuesday, following an indecisive session dictated by currency moves and economic data. LME three-month copper closed the open outcry session at $8,798.50 a metric ton, 0.6% below Monday's PM kerb close, while lead stood alone in positive territory, trading 1.1% higher at $2,309/ton.

Copper strengthened early in the day, boosted by short-covering activity and a weaker dollar, but slipped after the U.S. commerce department reported weaker than expected housing data and the greenback moved higher.

Daily data released by the LME showed inventories of aluminum rose 22,625 tons Monday to reach a record 4.7 million tons.

Crude oil futures fell modestly Tuesday to settle at the lowest level since Feb. 22, tracking swings in the dollar. Dollar strength early in the day helped drive crude down to a session low of $95.02 a barrel where it found support.

Light, sweet crude for June delivery on the New York Mercantile Exchange settled 46 cents lower at $96.91 a barrel. ICE July Brent crude settled 85 cents, or 0.8%, lower at $109.99 a barrel. Gold ended lower after several large hedge funds, including one controlled by billionaire investor George Soros, disclosed they had slashed their holdings of the precious metal.

Gold for May delivery settled down $10.60, or 0.7%, at $1,479.80 a troy ounce on the Comex division of the New York Mercantile Exchange. The most actively traded gold contract, for June delivery, ended down $10.60, or 0.7%, at $1,480.00 a troy ounce.

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