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U.S. stocks fell sharply Tuesday as July U.S. producer prices unexpectedly soared and dire home construction data increased pressure on financial stocks with mortgage exposure.

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U.S. stocks fell Tuesday after a spike in July wholesale inflation and as dire home construction data perpetuated the slide of mortgage-oriented stocks like Freddie Mac and Lehman Brothers Holdings.

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Home construction took its third tumble in a row during September, falling to the lowest level in 17 years, and a sign points to further decline in the fourth quarter.

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