Stocks extend losses on weak confidence report
NEW YORK -- Jitters about the economy put the stock market rally on hold again Tuesday.
Stocks fell after a private research group said consumer confidence slid more than expected in July. The market watches that measure closely because spending by consumers accounts for more than two-thirds of U.S. economic activity.
Analysts have been anticipating some pullback after the market soared 11% in just two weeks on surprisingly strong corporate profit reports. The latest run restarted a rally that began in March but faltered in mid-June on lackluster economic data.
"There is uncertainty about how fast the rally can go and how far it can go," said Robert Phillips, a managing director at Spectrum Management Group of Raymond James & Associates.
Trading proceeded with caution Tuesday after the latest round of earnings came in mixed. Viacom 's earnings were lower but better than expected. But Office Depot said its second-quarter loss widened and results fell short of analysts' expectations.
The third upbeat reading on the housing market since last week offered investors some room for optimism. The S&P/Case-Shiller Home Price index indicated that home prices posted their first monthly increase since summer 2006. Prices in major metropolitan markets rose 0.5% on average in May from the prior month. Year-over-year drops in prices slowed for a fourth month.
The report follows recent data that signaled sales of new and existing homes are stabilizing.
On Monday, stocks posted small gains after investors grappled with mixed earnings and economic reports. The market also logged a modest advance Friday.
Even with the mild selling Tuesday the stock market's rally remains intact. That is a sign that even many cautious investors aren't willing to pull out of stocks for fear of missing another leg of the rally.
Mixed earnings results tempered investors' optimism. Media conglomerate Viacom via.b said its second-quarter profit fell 32% but came in better than expected.
Office Depot odp said consumers and small businesses continued to pare spending, especially on pricier items like furniture and computers.
Independent oil refiner Valero Energy vlo fell 77 cents, or 4.1%, to $18 after it recorded a second-quarter loss.
Bond prices mostly rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.66% from 3.73% late Monday.
The dollar was mixed against other major currencies, while gold prices fell.
About two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 393.8 million shares, compared with 337 million at the same point Monday.
The Russell 2000 index of smaller companies fell 3.23, or 0.6%, to 547.65.
Overseas, Japan's Nikkei stock average fell 0.01%. In afternoon trading, Britain's FTSE 100 fell 0.7%, Germany's DAX index fell 0.3%, and France's CAC-40 declined 0.5%.