U.S. stocks fell Tuesday as disappointing earnings from Procter & Gamble and Dow Chemical and a round of weaker than expected economic data prompted worries about the strength of the recovery.

The Dow Jones Industrial Average declined 38 points, or 0.36%, to 10636.38, marking its fourth drop in the past five sessions. Procter & Gamble was the Dow's worst performer, with a drop of 2.12, or 3.4%, to 59.94.

The consumer products giant's fiscal fourth quarter sales jumped nearly 5% as the company launched new offerings and promoted its brands more heavily, but the lower prices nicked results and sales grew less than the company had projected.

Home Depot was also particularly weak, with a drop of 67 cents, or 2.3%, to 28.45, as the home improvement retailer was hurt by disappointing data on the consumer and housing sectors.

Consumer spending and income came in flat, while pending-home sales fell. However, Pfizer jumped 86 cents, or 5.6%, to 16.34.

The drug giant posted a 9.5% increase in second quarter earnings, with its adjusted earnings and revenue beating analysts' estimates.

Revenue was boosted by Pfizer's acquisition of Wyeth, and sales of its flagship drugs rose.

The Nasdaq Composite slipped 11.84, or 0.52%, to 2283.52. The Standard & Poor's 500 index dropped 5.40, or 0.48%, to 1120.46, with the materials sector leading its decline. The materials sector was weighed down by Dow Chemical, which tumbled 2.83, or 10%, to 25.50.

The chemicals company swung to a smaller than expected second quarter profit as revenue increased less than expected. In addition to the weak housing and consumer data, stocks were hurt on Tuesday by a bigger than expected drop in factory orders, which pointed to weakness in the industrial sector a day after better than expected manufacturing data has boosted the market.

European market

European shares ended mixed Tuesday, while the German market eked out small gains following strong earnings reports from BMW AG and Deutsche Post DHL.

The Stoxx 600 Europe index ended nearly unchanged, down 0.01% at 262.06 points. It surged 2.6% Monday to a level not seen since late April. Frankfurt's blue chip DAX index rose 0.3% to 6,307.91.

Shares of premium car maker BMW gained 2.6% after the firm's second quarter net profit surged to EUR834 million, topping forecasts. It sold 13% more vehicles in the quarter. Deutsche Post DHL shares rose 3%.

The company's second quarter net profit after minorities rose 23% to EUR81 million, also beating analyst forecasts.

Of the other major regional European benchmarks, the U.K. FTSE 100 index edged down 0.01% to end at 5,396.48. Banks were also lower, paring strong gains from Monday, with HSBC Holdings shares down 1.3%. The French CAC-40 index fell 0.1% to 3,747.51.

Asian market

Asian shares ended mostly higher Tuesday on Wall Street's gains Monday. But China bucked the trend, closing lower due to profit taking after recent gains.

The Nikkei Stock Average ended up 1.3% at 9694.01 while South Korea's Kospi Composite rose 0.5%. Hong Kong's Hang Seng Index ended 0.2% higher, giving back gains early in the session.

In contrast, the Shanghai Composite index fell 1.7% following earlier gains, with some brokers saying shares appeared overbought after a recent run up.

Monday, the index ended up 1.3% at 2672.52, its highest closing level since May 24.

Commodities and base metals

Base metals on the London Metal Exchange ended mostly lower Tuesday on disappointing U.S. economic data and softer equity markets.

Losses were modest despite the poor data, as upwards momentum built up during two weeks of gains remains strong and fresh money is being channeled into metals futures markets.

Copper ended 1.1% lower at $7,424 a metric ton. Lead was the only metal to push higher, rising to a three month high of $2,237/ton.

Arbitrage selling of copper and zinc in Asia weighed on the metals in early trading, as did inventory increases.

Copper stocks rose 1,000 tons, aluminum stocks increased by 22,650 tons, lead stocks were up 900 tons and zinc up 550 tons.

Crude oil futures continued to gain strength, rising above $82 a barrel for the first time since May, and ignoring a set of disappointing U.S. economic data Tuesday that hurt prices in other markets.

Crude's advance was supported by a weaker U.S. dollar, which makes dollar denominated oil a more attractive investment for holders of other currencies, and an expectation that supplies will decrease due to the effect of a tropical storm in the Gulf of Mexico last month.

Light, sweet crude for September delivery settled up 1.5%, or $1.21, at $82.55 a barrel on the New York Mercantile Exchange, the highest settlement since May 4.

Brent crude on the ICE futures exchange settled up recently at $1.86, or 2.3%, at $82.68 a barrel.

Gold futures inched higher as disappointing economic data slightly heightened concerns about the global recovery and boosted demand for a refuge investment, building on support from news that China is moving to expand its gold market.

The most actively traded gold contract, for December delivery, rose $2.10, or 0.2%, to settle at $1,187.50 an ounce on the Comex division of the New York Mercantile Exchange.