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(Close): Shares in cosmetics firm Elizabeth Arden sank 3.1% after the company said it is selling its weakest businesses and brands.

The firm is also cutting jobs and and is closing its Puerto Rico business and expects a one-off charge of up to $95m.

Walgreen shares dropped 1.7% after the pharmacy chain reported profits that missed analysts expectations.

Walgreen also said it is considering shifting its tax base overseas, by merging with Alliance Boots.

The company bought a 45% stake in Alliance Boots in 2012 and has an option to buy the rest of the company.

Several US firms have used mergers to move their tax base to countries with lower corporate tax rates.

Housing data

In economic news, new home sales jumped to a six-year high in May.

The Commerce Department said sales surged 18.6% to 504,000 units - the highest level since May 2008.

But a separate report showed that the growth in house prices is slowing.

The Case-Shiller 20-city home price index rose 10.8% in April from a year earlier, down from the 12.4% reading for March.

David Blitzer, chairman of committee which prepares the index said: "Near-term economic factors favour further gains in housing: mortgage rates are lower than a year ago, the Fed is expected to keep interest rates steady until mid-2015 and the labour market is improving."

Image copyright AP

Overall the Dow Jones Industrial Average fell 119.13 points, or 0.7%, to 16,818.13.

The S&P 500 index lost 12.63 points, or 0.6%, to 1,949.98.

And the Nasdaq fell 18.32, or 0.4%, to 4,350.36.