Stocks fell on Tuesday, despite an upbeat report on U.S. consumer confidence and rising home prices.
The Dow Jones industrial average closed at 13,008.68, down 64.33 points or 0.5 per cent.
The broader S&P 500 closed at 1,379.32, down 5.98 points or 0.4 per cent. In Canada, the S&P/TSX composite index closed at 11,664.71, down 93.17 points or 0.8 per cent.
The moves come ahead of a busy week for central banks, with both the U.S. Federal Reserve and the European Central Bank releasing monetary policy statements beginning on Wednesday.
Many investors are hoping that policy makers recognize recent disappointing economic reports and add to stimulus efforts.
On Tuesday, though, U.S. economic news was largely upbeat. The Conference Board's consumer confidence index rose for the first time in five months to a reading of 65.9 in July from 62.7 in June.
The S&P/Case-Shiller home price index for 20 U.S. cities rose 0.9 per cent in May on a seasonally-adjusted basis, topping expectations and adding to speculation that the housing market is turning around.
However, the news wasn't so upbeat in Canada, where economic growth slowed to just 0.1 per cent in May after 0.3 per cent growth in April.
The declines among North American stocks followed a lacklustre day in Europe, where rising Spanish bond yields again rattled investors.
The yield on Spain's 10-year government bond rose nearly 14 basis points, to about 6.7 per cent, adding to pressure that the country's borrowing costs might be unsustainable. Among stocks, the U.K.'s FTSE 100 fell 1 per cent and Germany's DAX index was relatively flat.
Within Canada's benchmark index, commodity prices dragged down commodity producers. Crude oil fell to $88.80 (U.S.) a barrel, down 98 cents. Gold fell to $1,610.50 an ounce, down $9.20.
Suncor Energy Inc. fell 2.3 per cent and Barrick Gold Corp. fell 0.3 per cent.
However, Rona Inc. surged 13.7 per cent after receiving – and rejecting – an unsolicited takeover offer of $14.50 (Canadian) a share from Lowe's Cos.
Rona shares had traded considerably higher before the Quebec government waded in, calling the company a strategic asset. Lowe's shares fell 5.6 per cent.
Banking giant UBS AG fell 4.2 per cent in New York after it reported a 58 per cent slide in its second quarter earnings, missing expectations.
Facebook Inc. fell 6.2 per cent, touching a new low not long after reporting its quarterly results.
U.S. Steel rose 9.1 per cent after reporting better than expected earnings.