Image source: Getty Images.

Stocks ticked higher on Tuesday as the Federal Reserve began a two-day monetary policy meeting that could produce the second interest-rate hike from the central bank in a decade. Still, investors didn't push indexes far ahead of what's likely to be volatile trading on Wednesday: The Dow Jones Industrial Average (^DJI 0.16%) and the S&P 500 (^GSPC 0.03%) each rose by less than 0.1%.

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Earnings news sparked significant down days for a few individual stocks, including Lennar (LEN 0.99%) and Ascena (ASNA), which posted quarterly results before Tuesday's opening bell.

Lennar is selling more expensive homes

Lennar's stock fell 4% in heavy trading after the homebuilder posted a 6% jump in profits for its fiscal third quarter. New home deliveries rose 7% and orders were up 8%, which was within management's targets of between 7% and 10% gains. Yet the growth figures represented a slowdown from the prior quarter's 12% delivery pop and 10% order improvement. Executives characterized the housing market's recovery as "choppy" over the last few months but said it was maturing at an overall slow and steady pace .

Image source: Lennar.

Average home prices ticked up by 3% to $362,000, but incentives worsened to 5.9% of sales from 5.6% last year. That helped push home sales gross margins down to 23% from 24%. The company saw strength in each of its geographic markets except the Houston area where oil and gas volatility is pinching the local economy. Lennar has sold 617 homes in that region over the last nine months, compared to 685 houses in the year-ago period.

On the financing side, financial services posted their strongest earnings quarter since the start of the housing crisis, with earnings up 35%. Executives said the jump can be tied to higher refinancing volume and better pricing on mortgage and title services. Investors have to balance Lennar's strong profit position against signs that its growth pace could be leveling off.

Ascena is losing customers

Ascena, which owns several retail apparel chains including Anne Taylor, Lane Bryant, and Dress Barn, dove by 30% after posting surprisingly weak fiscal fourth-quarter results. Comparable-store sales fell 4% to outpace management's 2% to 3% forecast on weak customer traffic trends and increased competition. Among its portfolio of six retailing brands, Maurices fared the worst with a 9% comps drop while Lane Bryant was the only chain to see positive comps, of 1%. The fiscal year that just closed was "a challenging year for ascena," CEO David Jaffe said in a press release, "characterized by a highly competitive selling environment and significant store traffic headwinds."

The good news is that gross profit margin improved thanks in part to a shift away from a highly promotional sales model at the Justice chain. Inventory levels also appear healthy, given that they fell 8% during the quarter.

But Ascena doesn't expect growth trends to get much better any time soon. Its 2017 forecast calls for comps to decline by between 1% and 2%. That outlook assumes customer traffic levels continue to decline, and reflects the fact that comps have been negative through the first few weeks of the fiscal first quarter. That downbeat forecast convinced investors to ignore the improvements coming from the Justice brand and the potential for solid returns out of the recent Ann Taylor acquisition to send the stock to a new all-time low on Tuesday on fears over a brutal holiday shopping season on the way.