Stocks Sink on Consumer Confidence, Inflation and Housing Worries

Stocks plunged on Tuesday as a wave of pessimism hit the market. Negative economic news, inflation worries, and weakness in the financial sector led to large losses in the major averages.

Consumer Confidence fell, the Case-Shiller index showed U.S. house prices declined in the second quarter and the Fed minutes revealed greater concerns about inflation.

The financial sector was hurt by Merrill Lynch's (MER | Quote | Chart | News | PowerRating) downgrades of:
CitiGroup (C | Quote | Chart | News | PowerRating)
Lehman Brothers (LEH | Quote | Chart | News | PowerRating)
Bear Stearns (BSC | Quote | Chart | News | PowerRating).

In other stock news, Home Depot (HD | Quote | Chart | News | PowerRating) agreed to cut the sales price for HD Supply by more than $1.8 billion (read more).

EarthLink (ELNK | Quote | Chart | News | PowerRating) announced plans to cut 900 jobs as part of its restructuring plan (full story).

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