4:20 pm : The stock market posted a 0.9% loss Tuesday, as continued concerns regarding financials, an increase in wholesale inflation and a rebound in crude oil prices weighed on investor sentiment.

The July Producer Price Index brought disappointing news, although the CPI report last week showed some cost-push inflation pressures, so the PPI reading is not a complete surprise. Total PPI rose 1.2% in July (consensus 0.6%) and core PPI, which excludes food and energy, rose 0.7% (consensus 0.2%). That leaves the year-over-year increase for total PPI at 9.8% -- the highest since 1981. Core PPI is up 3.5% year-over-year, the highest level since 1991.

In other economic news, July housing starts and building permits posted steep declines, although this was partially due to a change in permit applications requirements during June. Starts fell 11% to a 965,000 annual rate (consensus 960,000) and building permits dropped 17.7% to a 937,000 annual rate (consensus 970,000). Homebuilding stocks fell 3.6%.

Eight of the ten economic sectors posted a loss in broad-based weakness.

The financial sector (-3.0%) acted as the main drag. AIG (AIG 20.37, -1.23) tumbled 5.7% after Goldman Sachs said there is an increased chance that the insurance giant may need to raise more capital, according to Reuters. Lehman Brothers (LEH 13.10, -1.93) fell 12.8% following several negative media reports, including a Wall Street Journal article that said Lehman's third quarter has turned ugly.

Meanwhile, Fannie Mae (FNM 6.04, -0.11) and Freddie Mac (FRE 4.18, -0.21) were unable to recover from the previous session's steep decline. Freddie sold new five-year notes at 4.172%, which