NEW YORK - US STOCKS dropped for the second consecutive day on Tuesday in thin pre-Christmas trade following bearish data on the ailing housing sector and persistent concerns over the fate of struggling automakers.

The Dow Jones Industrial Average lost 100.12 points (1.18 per cent) to 8,419.65 at the closing bell, after easing 0.69 per cent a day earlier.

The tech-rich Nasdaq gave up 10.81 points (0.71 per cent) to 1,521.54 while the Standard & Poor's 500 broad-market index also fell 8.47 points (0.97 per cent) to 863.16.

The market reacted to government reports showing weaker than expected declines in new home and existing home sales in November as well as a cut in debt ratings of automakers battling bankruptcy.

The declining price of oil amid depressing economic reports also dampened investors' spirits.

'Stocks actually opened with broad-based gains, advancing as much as 1.0 per cent (but) those gains quickly turned into losses, though, as sellers entered the ring, focusing much of their effort on the financial sector,' said analysts at Briefing.com.

Trading volume remained light ahead of the December 25 holiday.

'Less than one billion shares were exchanged on the NYSE (New York Stock Exchange) this session. That is the least volume in a full trading day since August,' Briefing.com said. -- AFP