The markets opened lower as pending home sales fell to their lowest levels on record. The Dow lost 22 points to 12,589 while Nasdaq fell 6 points to 2358.

On the upside

An analyst upgraded Ulta Salon, Cosmetics & Fragrance (Nasdaq: ULTA) on expected growth for the beauty store and salon chain.

The financial services sector rose on hopes of lower interest rates. Shares of brokerage firms like FCStone Group (Nasdaq: FCSX) rallied after recent losses.

MSC Industrial Direct (NYSE: MSM) raised its 3rd quarter profit and revenue outlook due to strong demand for its industrial supplies.

On the downside

Shares of Washington Mutual (NYSE: WM) fell as details of a $7 billion capital infusion from an investment group emerged.

Advanced Micro Devices (NYSE: AMD) announced plans to cut 10% of its workforce while warning of disappointing chip sales in the 1st quarter. Shares of rival Intel (Nasdaq: INTC) also lost ground.

Alcoa (NYSE: AA), the world's 3rd largest aluminum producer, posted lower earnings that met expectations and offered a strong outlook for the year, but investors worried about costs and a weak dollar squeezing margins.

In the broad market, declining issues outpaced advancers by a margin of more nearly 2 to 1 on the NYSE and by more than 4 to 3 on Nasdaq. The Russell 2000 which tracks small cap stocks slipped 2 points to 710.