U.S. stocks dropped Tuesday August 2 2011

U.S. stocks dropped Tuesday August 2 2011 : U.S. stocks dropped Tuesday, adding to the year's longest losing streak, as worries about consumer spending trumped any enthusiasm surrounding an expected deal to raise the federal borrowing limit.

The Dow Jones Industrial Average slid 100 points, or 0.8%, to 12032, led lower by General Electric, which dropped 3%. Only two of the 30 Dow components traded in positive territory. The blue-chip index is on pace for its eighth straight decline, which would be its longest since October 2008. It has lost 700 points during the losing skid.

Pfizer was one of the Dow's biggest decliners, dropping 2%. The drugmaker reported second-quarter earnings that were slightly above expectations, but revenue fell shy of estimates. The company also maintained its full-year outlook and said it would buy back $5 billion to $7 billion worth of stock this year.

The Standard & Poor's 500-stock index shed 15 points, or 1.2%, to 1272, led lower by industrial and consumer discretionary stocks. All 10 sectors in the S&P 500 traded in the red.

The technology-oriented Nasdaq Composite gave up 7 points, or 0.3%, to 2738.

Investors were disappointed by news that Americans cut their spending by the most in nearly two years and saved at a faster rate during June, a pair of signs that underscored the economy's lack of vigor.

Spending decreased 0.2% after rising an upwardly revised 0.1% in May, according to the Commerce Department. The drop was the biggest since September 2009. Incomes rose 0.1%, after increasing 0.2% in May.

The consumer-spending figures highlight another troubling aspect of the weak recovery. Last week brought news that the U.S. economy barely grew in the first half, and on Monday came a report showing that manufacturing is shaky. Friday's employment report is expected to continue to show a stagnant labor market.