* Markets volatile as investors look to Spain
* PetSmart to replace Sunoco in the S&P 500 index
* Mosaic shares tumble after weak earnings, sales
* Indexes down: Dow 0.6 pct, S&P 0.3 pct, Nasdaq 0.1 pct
By Ryan Vlastelica
NEW YORK, Oct 2 U.S. stocks fell on Tuesday
after opening higher as uncertainty surrounded Spain's financial
bailout and investors worried about disappointing third-quarter
The Dow was pressured by stocks closely tied to the pace of
growth, including Caterpillar Inc and Boeing Co.
A major headwind for the global economy has been falling demand
from Europe, which has been drifting toward recession.
Spain was said to be ready to ask the euro zone for help,
but Germany has signaled that Madrid should hold off on making
its request, according to European officials on Monday.
"Spain being rescued would be good for risk assets and
ultimately global growth, but while the benefits are largely
priced in, we're still getting conflicting signals that
understandably have investors apprehensive," said Brian Barish,
president of Cambiar Investors LLC in Denver.
The S&P rose nearly 6 percent in the third quarter, lifted
by accommodative actions by the U.S. Federal Reserve and
European Central Bank, which market participants bet would boost
If Madrid were to seek a rescue, it would trigger European
Central Bank buying of its bonds and help to ease U.S.
investors' nervousness about the euro zone's impact on the U.S.
"Until we get some kind of clarity, we should expect a lot
of volatility and difficulty holding onto gains," said Barish,
who helps oversee $7 billion in assets.
The Dow Jones industrial average was down 81.90
points, or 0.61 percent, at 13,433.21. The Standard & Poor's 500
Index was down 3.73 points, or 0.26 percent, at 1,440.76.
The Nasdaq Composite Index was down 1.92 points, or 0.06
percent, at 3,111.61.
The Dow and S&P 500 extended losses and the Nasdaq turned
negative, with weaker-than-expected results from Mosaic
adding to worries about the upcoming third-quarter profit
Mosaic tumbled 4.7 percent to $55.27 as the S&P's biggest
percentage decliner after reporting earnings and revenue that
JPMorgan Chase & Co was sued by New York's attorney
general on Monday in the first action to come out of a working
group created by President Barack Obama to go after wrongdoing
that led to the financial crisis. The civil fraud lawsuit
centered on mortgage-backed securities packaged and sold by Bear
Stearns, which JP Morgan acquired.
JPMorgan shares edged down 0.8 percent to $40.65.
Major car companies reported September sales, with General
Motors and Chrysler Group LLC posting gains while Ford
Motor Co remained flat.
GM, the largest U.S. automaker, reported a 1.5 percent
increase, while Ford reportred sales on par with its results
from a year earlier. Chrysler showed a 12 percent jump in sales.
PetSmart Inc shares added 2.4 percent to $69.15
after S&P Dow Jones Indices said after Monday's close the
company will replace Sunoco in the S&P 500 on Oct. 4.
Hedge fund manager David Einhorn again made critical
comments about Green Mountain Coffee Roasters Inc, a
stock in which he publicly unveiled a short position a year ago,
but the stock rallied 1.9 percent to $23.77 as one of the
biggest gainers on the Nasdaq 100.
Shares of ArQule Inc tumbled 57 percent to $2.14
after the biotechnology company and Japan's Daiichi Sankyo
said they will end a late-stage trial of their
experimental lung cancer drug.