Stocks lower after orders for durable goods fall

— -- A new report on U.S. factory orders was the latest in a sign that the economy may not rebound as fast as hoped.

The Commerce Department said durable goods orders fell 2.5% in June, the largest drop since January and a sign of continuing troubles in the auto and aircraft industries.

The stock market's two-week market rally is on hold after earnings reports and the Conference Board's reading on consumer confidence also fell short of expectations.

The markets appeared unmoved by the Internet search deal announced between Microsoft and Yahoo. Traders brushed off gains in overseas markets, which rose on generally positive earnings from leading industrial companies.

Investors have decided to put their two-week market rally that began with strong earnings and economic news on hold. After such a huge advance that saw major indexes climb more than 11%, the market has gotten more cautious.