Stocks close lower after early gain

Stocks closed lower after an afternoon slide erased early gains in major US indexes.

New home sales boosted stocks early on before they fell back in the red
New home sales boosted stocks early on before they fell back in the red

The market was slightly higher in the morning following encouraging news on new home sales and consumer confidence. Stocks drifted lower in the afternoon and ended in the red for the day.

Walgreen fell 2% after the drug store chain's results fell short of Wall Street's expectations. Exxon Mobil lost 1.6%, the most of the 30 stocks in the Dow Jones industrial average.

The Dow fell 119 points, or 0.7%, to 16,818.

The Standard & Poor's 500 index fell 12 points, or 0.6%, to 1,949 and the Nasdaq composite fell 18 points, or 0.4%, to 4,350.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.58%.