Weak demand for fertilizer tugs at stocks

A drop in demand from China and India hurt the profits of Mosaic, the US's largest fertilizer company. But utilities and health care stocks helped pull the S&P 500 above the break-even mark.

Mixed signals on the world economy tugged on major stock indexes Tuesday.

The largest U.S. fertilizer company, Mosaic, said weak demand from China and India have hurt its profits. Mosaic, Dupont and stocks of other companies in the materials industry fell.

But utilities and health care stocks, where investors often retreat in a slow-growing economy, helped pull the Standard & Poor's 500 index above the break-even mark.

The S&P 500 index gained 1.26 to close at 1,445.75. The Dow Jones industrial average dropped 32.75 points to 13,482.36. Dupont led the Dow lower, sinking 86 cents to $49.50.

The market could remain quiet until the government gives its monthly jobs report on Friday, said Paul Zemsky, chief investment officer of multi-asset strategies at ING Investment Management. Economists expect the unemployment rate increased to 8.2 percent in September from 8.1 percent in August.

Zemsky said a surprise swing up or down "could change the direction of the stock market and the Presidential election."

Indexes took a turn lower at midday after Spain's prime minister said that he's not preparing a request for a bailout loan. Traders have been anticipating that the Spanish government would ask for help for nearly a month. Spain needs to ask for money from Europe's bailout fund before the European Central Bank can start buying Spanish government bonds.

Mosaic reported net income and sales early Tuesday that fell short of analysts' estimates. The company blamed slumping demand for its fertilizer overseas as well as hurricanes for slower production. The results pushed the company's stock down $2.25 to $55.76.

In other trading, the Nasdaq composite rose 6.51 points to 3,120.04.

The yield on the benchmark 10-year U.S. Treasury note slipped to 1.61 percent from 1.63 percent late Monday after Spain's prime minister, Mariano Rajoy, said a bailout request wasn't coming.

European markets closed slightly lower before Rajoy spoke. Benchmark stock indexes fell 0.3 percent in Germany, 0.2 percent in Britain and 0.6 percent in France. Borrowing costs fell for Spain and Italy.

Most car makers reported better sales for September. But sales for U.S. automakers were mostly flat. General Motors reported a slight increase in sales from a year earlier, but its stock gained 3 percent after the hedge-fund manager David Einhorn recommended it. GM rose 59 cents to $23.68.

Core Logic, a private provider of real estate data, said U.S. home prices in August rose 4.6 percent compared with the same month last year. Prices also rose 0.3 percent from July, the sixth consecutive month of gains.

Other gauges of the housing market have improved in recent months, including home sales.

On Monday, the manufacturing survey from the Institute for Supply Management also showed improvement. ISM's main index nosed above 50, a reading that signals growth. The index had been below 50 from June through August.

Investors are also looking ahead to quarterly earnings, which begin in earnest when the aluminum company Alcoa reports results Oct. 9.

Among other stocks that made big moves Tuesday:

— News that Deutsche Telekom said it may buy the cellphone carrier MetroPCS Communications sent MetroPCS's stock up 18 percent. Reports said the board of Deutsche Telekom, which owns T-Mobile USA, would vote to approve the deal Wednesday. MetroPCS gained $2.05 to $13.57.

— PetSmart rose 99 cents to $68.55. Standard & Poor's said the pet-store chain will replace Sunoco in the S&P 500 index at the end of trading Thursday. The S&P 500 is the most commonly used benchmark for stockmutual funds. When a company joins the index, mutual fund managers are more likely to buy it. Sunoco was bought by Energy Transfer Partners.