NEW YORK — Stocks fell Tuesday as the prospects for both peace and third-quarter profits appeared to dim.

A cool U.S. reaction to Iraq’s acceptance of the return of weapons inspectors, a profit warning from Dow component McDonald’s and the news that industrial production fell in August for the first time this year put the brakes on an expected rally, sending the equity markets southward.

After falling from early in the day, the Dow Jones Industrial Average sank 172.63, or 2.1 percent, to finish at 8,207.55. The Standard & Poor’s Retail Index lost 17.58, or 2 percent, to 883.52, while the Nasdaq plunged 15.94, or 1.3 percent, to 1,259.94.

Retail stocks went along for Tuesday’s rocky ride and they tended to drop farther than the overall market.

Specialty stores in general suffered the greatest declines among retailers. United Retail was among those hit hard, dropping 65 cents, or 14.3 percent, to $3.90 a share. Other specialty stores dropping on the day included: American Eagle Outfitters, down 25 cents, or 1.6 percent, to $15.91; Abercrombie & Fitch, 33 cents, or 1.4 percent, to $23.70; Ann Taylor, 66 cents, or 2.5 percent, to $25.61; Bebe Stores, 99 cents, or 6.5 percent, to $14.26; Charming Shoppes, 23 cents, or 3.2 percent, to $7.01; Chico’s FAS, 50 cents, or 2.6 percent, to $18.50; Claire’s Stores, $1.27, or 5.4 percent, to $22.23; Dress Barn, 15 cents, or 1.3 percent, to $11.25; Children’s Place, 46 cents, or 2.4 percent, to $18.43; Pacific Sunwear of California, 39 cents, or 1.7 percent, to $22.84; Talbots, 51 cents, or 1.5 percent, to $33.06; Urban Outfitters, $1.59, or 5.7 percent, to $26.11, and Wet Seal, 73 cents, or 5.6 percent, to $12.24.

The discount channel fared a little better as Target dropped $1.19, or 3.2 percent, to $35.71 and Wal-Mart was off 43 cents, or 0.8 percent, $54.32.

Department stores seeing the steepest drops included Dillard’s, down 49 cents, or 1.9 percent, to $25.51; Federated Department Stores, 52 cents, or 1.4 percent, to $36.78; J.C. Penney Co., 39 cents, or 2.1 percent, to $18.42; Kohl’s, $1.55, or 2.2 percent, to $70.25, and Neiman Marcus, 42 cents, or 1.3 percent, to $31.28.There were some bright spots on the day, especially among stocks that were perceived as a value at relatively low prices. Bon-Ton Stores extended 23 cents, or 5.2 percent, to $4.62; Cache, 24 cents, or 2.3 percent, to $10.46; Dollar General, 76 cents, or 5.7 percent, to $14.04, and Factory 2-U Stores, 8 cents, or 3.1 percent, to $2.68.

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