Word of trouble from US's 10th-largest mortgage lender abruptly pulled the plug on the stock market's attempted recovery, with the Dow wiping out a two-day rally to end Tuesday with a near 150-point loss, and a monthly decline of 1.5%. Concerns about credit markets and bad-home loans resurfaced with news that American Home Mortgage Investment Corp. might liquidate its assets after failing to meet margin calls.

Early in the session, stocks soared following strong earnings from General Motors Corp. and Sun Microsystems Inc. and amid somewhat mixed economic data. But the market pulled back after American Home Mortgage Investment Corp. said Tuesday it hasn't been able to tap into its credit lines and has hired advisers to consider its options, including the sale of its assets.

Wall Street has been concerned about lenders after some loans made to borrowers with poor credit have gone bad, and that anxiety contributed to the market's big plunge last week. Tuesday's trading showed how vulnerable the market remains, and how any advance can quickly evaporate.

The Dow fell 146.32, or 1.10%, to 13,211.99 after being up as much as 140 points during the session. The move lower undid a nearly 93 point gain the blue chips saw Monday in a partial rebound from the 585 points they lost over the course of Thursday and Friday. Broader stock indicators fell. The Standard & Poor's 500 index declined 18.64, or 1.26%, to 1,455.27, and the Nasdaq composite index fell 37.01, or 1.43%, to 2,546.27.

Bond prices, which move opposite yields, rose as investors quickly fled stocks. The 10-year Treasury note's yield fell to 4.75% from 4.81% late Monday.

Oil prices closed above $ 78 a barrel for the first time Tuesday on the New York Mercantile Exchange, advancing $ 1.38 to $ 78.21. The dollar was mixed against other major currencies. Gold prices closed higher on the New York Mercantile Exchange.