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Stocks closed broadly lower after a mortgage lender said it was unable to borrow money and crude oil closed above $78 a barrel for the first time. "We think the corrective phase in the

financials is not yet over," said John Roque, technical analyst at Natixis Bleichroeder. "So we think, for the overall market, the recent decline is not yet over.  We think

we're going to have another leg down." The decline reversed gains earlier in the session from tame inflation data and strong earnings from General Motors and Sun Microsystems. At

one point, the Dow Jones Industrial Average was up 140 points. It finished down nearly 150. For the month of July, the Dow fell 1.5% but remains up 6% for the year. The S&P 500 lost 3.2%

for the month but is up 2.6% for the year. The Nasdaq fell 2.2% in July but is up 5.4% for the year. "Subprime concerns are still going to linger," Peter Cardillo, chief market

economist at Avalon Partners, told CNBC.com. "Anytime you have some negative headline it will be a worry for the market, but I also think the economic data today indicates the economy

can overcome any further decay in the housing market." Shares of troubled lender American Home Mortgage opened sharply lower Tuesday afternoon after trading in the stock was halted

Monday.  The company said it can no longer provide funding for home loans. "My suspicion is we're not over the subprime woes," said Phil Dow, director of equity strategy at

RBC Dain Rauscher. "My guess is there will be further hurdles to come, but by and large, the trend is up in my opinion." The influential financials sector turned negative weighing

on the overall market. Information technology lost ground after shares of Apple fell amid rumors about a cut in the production of iPhones. That helped drag down the Nasdaq.  Crude oil closed

at a record high, above $78 a barrel. "I think part of the reason why we've given up some of the gains today is oil trading above $78," said Cardillo. "I think

we're in a trading range and we stay there for a long time to come," Stephen Leeb, research chairman for The Complete Investor, told CNBC.com. "At least, this is a sign that

we're not going straight down.  Stocks are fundamentally cheap and worldwide growth is up over 5%." General Motors helped boost the Dow for most of the session as

better-than-expected earnings results saw shares in the auto-maker rally.  GM said its adjusted net income, excluding special items, was $2.48 a share, far outpacing the $1.13 a share

earnings forecast by analysts surveyed by Thomson Financial. Shares of Sun Microsystems also rose after the server and software maker reported fiscal fourth-quarter profit that beat Wall

Street expectations. Sun Microsystems said it earned 9 cents a share, nearly double the estimate of 5 cents a share from analysts polled by Thomson Financial. Some positive economic data

helped to boost investor sentiment earlier in the session. One of the Federal Reserve's favorite economic indicators, the Personal Consumption Expenditure Deflator, rose 0.1% in June,

less than the expected rise of 0.2%. The Commerce Department data showed stable prices that have eased the year-on-year rate of nonfood, nonenergy inflation to 1.9%, the lowest in more than

three years. The government also reported that personal income rose 0.4% in June, while personal spending rose a less-than-forecast 0.1%. The Conference Board Consumer Confidence Index

climbed to a six-year high as an improvement in business conditions and the job market lifted consumers' spirits.  The index was 112.6 in July, up from 105.3 in June, and better than

economists' expectations. "With all of the things that have happened - housing, gasoline - suurprisingly we saw only a little pump down in confidence since February and now by

July, we're roughly back to where we were in February," said Ken Goldstein, senior economist with The Conference Board. "These are very resilient consumers." The Chicago

Purchasing Manager's Index of Midwest manufacturing activity fell to 53.4 in July from 60.2 in June.  Economists polled by Reuters had forecast a July figure of 58.0. Construction

spending fell 0.3% in June.  Economists were expecting a slight rise. More deal news failed to keep the markets in the green. News Corp. appears to have enough votes to win control of Dow

Jones . The Rupert Murdoch-run company gained key support from the controlling Bancroft family.  News Corp. bid $60 a share for Dow Jones, the parent of The Wall Street Journal. Marathon Oil

said it would pay $6.2 billion for Western Oil Sands.  Marathon also announced a $2 billion buyback. Billionaire investor Nelson Peltz said he is willing to bid up to $41 a share for

Wendy's, however he said he would not sign a confidentiality agreement as part of the deal. Peltz owns Triarc Cos., the parent of competing fast-food chain Arby's. New York light

crude futures rose to close above $78 a barrel on expectations that weekly inventory data due out Wednesday will show a draw down in U.S. crude oil supplies. Boston-based hedge fund Sowood

Capital Management announced Monday it would shut down, having lost half its assets in just four weeks from bad bond market bets. EUROPEAN STOCKS CLOSE SHARPLY HIGHER European stocks closed

firmly higher Tuesday, reversing a four-day losing streak for the major indexes. The London FTSE-100, Paris CAC-40 and Frankfurt DAX were all higher, while the FTSE CNBC Global 300 was also

higher. Earnings remained at the forefront as telecom equipment maker ALCATEL-LUCENT missed expectations with a second-quarter net loss of $459.3 million. Lower sales and merger related

costs weighed, but the company confirmed its full-year sales growth expectations. Shares slumped on the news. Shares of RYANAIR HOLDINGS soared after the low-cost carrier beat expectations

with a 20% rise in net profit for its first-quarter. The Irish airline also said it would beat its full-year profit goal, despite tight price competition in the sector. Also on the earnings

front, LLOYDS TSBposted a 15% rise in underlying profit, the fifth-largest British bank said it sold its ABBEY LIFE insurance unit for almost $2 billion and planned to hike dividends. Shares

in Lloyds gained. In other news, advisers to the U.S. Food & Drug Administration said Monday that GLAXOSMITHKLINE’S blockbuster diabetes drug, Avandia, shouldn’t be withdrawn from the

market despite its links to increased risks of heart attacks. Shares in GSK rose as much as 3.4% in London trading after rising more than 7% in New York trading. ASIA MOSTLY HIGHER Asian

markets were mostly higher in the afternoon session Tuesday after a rebound on Wall Street. South Korea closed over 1% higher, but Japan finished weaker. Investors remained cautious that

ongoing U.S. subprime mortgage market woes could still spread to wider credit markets last week's poor performance by U.S. stocks, which suffered the worst percentage fall in nearly

five years. Tokyo's Nikkei 225 Average closed a touch lower, dragged down by KYOCERA, which plunged after its earnings failed to impress investors, while U.S. credit concerns and

political uncertainty after Japan's election also weighed on the market. NIPPON STEEL and JFE HOLDINGS declined after news that Japan's Fair Trade Commission (FTC) has started an

investigation into the world's No.2 and No.4 steelmakers over possible violations of anti-monopoly rules in the market for construction-use steel. South Korean shares rose 1.4% for a

second winning session as improved business sentiment data lifted manufacturers such as LG ELECTRONICS, helping the main index to its best month since November 2005. But KOOKMIN BANK dropped

3.26% a day after the country's biggest lender posted a slump in quarterly earnings. Australia's S&P/ASX 200 INDEX finished higher helped up by gains in miners such as BHP

Billiton and energy firms. Hong Kong stocks were 2% higher, fuelled by a Wall Street rebound, as the city's lenders shot up a day after forecast-beating earnings reports, with HSBC

HOLDINGS leading the gains. HANG SENG BANK rallied to all-time highs following its record first-half profit while BANK OF CHINA and BANK OF EAST ASIA jumped on expectations that they would

also post strong interim earnings. Singapore's STRAITS TIMES INDEX was higher by 1.2%. Shares of China-based YONG XIN INTERNATIONAL HOLDINGS, which makes steel strips used in fiber

optic cables and batteries, started trade at S$0.90, three times their issue price of S$0.30. Chinese shares were higher after the Chinese central bank announced late Monday another

tightening of monetary policy. The SHANGHAI COMPOSITE INDEX has risen more than 13% to record highs in the past seven trading days on better-than-expected corporate earnings for the first

half of the year.