NEW YORK - Wall Street retreated in another turbulent session Tuesday, as investors refrained from making big bets in a volatile market battered by a stream of weak economic data. The market, which has closed lower in four of the past five sessions, has been volatile amid worries about how long a recession might be. That's driven many retail investors to the sidelines, while big institutional traders like hedge funds keep major stock indexes vacillating. Stocks have been trading erratically for several weeks as investors try to gauge the direction of the economy - and there was more bad news on Tuesday, which made it difficult for Wall Street to hold on to the day's early advance. The government reported that wholesale prices plunged a record amount in October, a drop that could indicate a rising threat of deflation.

Many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades. However, the expectation is that easing inflation pressures will give the Federal Reserve room to cut interest rates further to combat the downturn.

Meanwhile, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke were grilled on Capital Hill about their management of a $700 billion financial bailout. Paulson told the House Financial Services Committee that the U.S. has "turned a corner" in averting a financial collapse, but more work needs to be done.

Early in Tuesday's session, investors found some encouragement in an unexpected announcement from Hewlett-Packard Co. that fourth-quarter and 2009 earnings will come in above Wall Street projections. The results signal HP, the world's largest-maker of personal computers, is weathering the economic crisis that has siphoned off sales at other technology companies.

"What you're seeing is just a total lack of buyers," said Joe Keetle, senior wealth manager at Dawson Wealth Management. "There is no enthusiasm on the buy side right now. You got a little spurt of it today because Hewlett-Packard's earnings were good and their outlook was good."

In midafternoon trading, the Dow Jones industrial average fell 85.23, or 1.03 percent, to 8,188.35.

The Standard & Poor's 500 index fell 7.95, or 0.93 percent, to 842.80, while the Nasdaq composite index fell 33.48, or 2.26 percent, to 1,448.57. The Russell 2000 index of smaller companies fell 12.40, or 2.75 percent, to 438.90.

Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to a light 680.2 million shares. The fact that trading volume remains light is also a concern for analysts because that tends to skew the market's moves.

On Monday, Wall Street finished sharply lower in a volatile session, with the Dow giving up 223 points. Much of that loss came within the last hour of trading, a pattern that has only escalated in the past few weeks.

Analysts said the market continues to search for a much-elusive bottom, and could yet again retest lows. The major indexes continued to attempt some sort of recovery from October's devastating losses.

"We're going to need more strength from here for a period of time to develop a convincing story that the market has bottomed," said Alan Gayle, senior investment strategist at RidgeWorth Investments.

The uncertainty on Wall Street has kept Treasury bonds in high demand. The yield on the three-month T-bill, considered one of the safest assets around, rose to 0.11 percent from 0.10 percent late Monday. Longer-term Treasurys also moved higher, with the yield on the benchmark 10-year note falling to 3.53 percent from 3.66 percent.

Yields that low suggest that investors are willing to earn virtually nothing on their investments as long as their principal is preserved.

In other corporate news, executives of General Motors Corp. Ford Motor Co. and Chrysler LLC and the head of the United Auto Workers union will testify at a Senate Banking Committee hearing. The automakers, seeking $25 billion in government aid, have the backing of Democratic congressional leaders, but the Bush administration and Republican lawmakers are against the proposed bailout.

Ahead of that meeting, Paulson said during his testimony earlier in the day that the administration remains firmly opposed to dipping into the government's financial bailout fund for a $25 billion rescue package for Detroit's Big Three automakers, no matter how badly they need the help.

"There are other ways" to help them, Paulson said.

Ford shares fell 2 cents to $1.70, while GM shed 37 cents, or 12 percent, to $2.82. Chrysler is owned by an investor group that includes private-equity firm Cerberus Capital Management.

Home Depot Inc. reported a 31 percent drop in third-quarter profit due to weak consumer spending at its established locations. The profit was better than analysts anticipated, and its shares rose 50 cents, or 2.3 percent, to $20.41.

Yahoo Inc. shares spiked 51 cents, or 5 percent, to $11.14 after founder Jerry Yang announced that he was stepping down as chief executive of the Internet company. Many analysts believe the departure will accelerate an overhaul of Yahoo and lead to a sale to Microsoft.

The dollar fell against most other major currencies. Gold prices also fell. Light, sweet crude fell 27 cents to $54.68 a barrel on the New York Mercantile Exchange.

In Asian trading, Japan's Nikkei index fell 2.28 percent, and Hong Kong's Hang Seng Index fell 4.54 percent. In European trading, Britain's FTSE 100 rose 1.47 percent, Germany's DAX index rose 0.49 percent, and France's CAC-40 rose 1.11 percent.

---

AP Business Writers Sara Lepro and Madlen Read contributed to this story.

---

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Written By JOE BEL BRUNO

Email To A Friend