Stocks turned lower Tuesday as worries about a drop in consumer confidence offset better-than-expected result from DuPont.
The major averages have risen in five of the past six sessions and the Dow has posted triple-digit gains for three consecutive sessions for the first time since December 30, and 31 of 2008 and January 2, 2009.
The Conference Board reported its gauge of consumer confidence fell to 50.4in July from 54.3 in June; economists surveyed by Reuters had expected the index to drop to 51.
"Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves," said Lynn Franco, director of the Conference Board Consumer Research Center. "Given consumers' heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season."
Consumer spending is crucial to the economic recovery as it accounts for more than two-thirds of economic activity.
Consumer-discretionary stocks were among the morning's worst performers, with Gap and Best Buy both down more than 2 percent.
Teen chains Abercrombie & Fitch and Delia*s were down more than 1 percent.
Walmart was the biggest drag on the Dow after Stifel Nicolaus downgraded the discount giant's stock to "hold" from "buy," saying recent management changes indicate the company is being forced to focus on sluggish sales.
"We simply expect Wal-Mart will be 'turning the battleship' for some time due to recent managerial changes," analysts said.
Meanwhile, Stifel upgraded wholesaler Costco to "buy" from "hold."
Home prices rose more than expectedin May, according to the latest Standard & Poor's/Case Shiller home-price indexes.
DuPont led Dow gainers, up over 4 percent, after the company beat earnings estimates of 94 cents per share with its second-quarter profit of $1.17 per share excluding items.
Financials were the morning's best-performing sector, with Bank of America and JPMorgan rounding out the Dow's top three, after strong earnings from Swiss bank UBSand from Germany'sDeutsche Bank.
The Treasury Department announced a conference for next month to discuss plans for Fannie Mae and Freddie Mac.
And the Treasury will sell $38 billion in 2-year notes later, with the results of the auction available shortly after 1 pm. It will follow up by selling $37 billion in 5-year notes Wednesday and $29 billion 7-year notes Thursday.
Shares of BP slipped after the oil giant posted a $17 billion dollar second-quarter loss due to the costs of the Gulf oil spill and announced that American Bob Dudley will succeed Tony Hayward, effective Oct. 1. Hayward will be transferred to BP's operations in Russia.
Apple shares were higher after the U.S. copyright office made a ruling that will allow iPhone users to add different software to their phones— including the right to change wireless-service providers.
Yahoo's part-owned Yahoo Japan unit is teaming up with Google to offer Google's search engine technology, sidestepping Yahoo's extensive partnership with Microsoft.
Insurers Aetna and Aflac are among those issuing their quarterly numbers after the closing bell, along with chip maker Broadcom.
TUESDAY:Two-year auction; Earnings from Aetna and Broadcom after the bell
WEDNESDAY: Weekly mortgage apps; advance report on durable goods; 5-yr note auction; Beige Book; Earnings from: Boeing, Comcast, ConocoPhillips, Sprint and Visa
THURSDAY: Weekly jobless claims; 7-yr note auction; Microsoft analyst meeting; Earnings from: AstraZeneca, ExxonMobil, Royal Dutch Shell, Kellogg, Motorola and Amgen
FRIDAY: First release of 2Q GDP; employment cost index; Chicago PMI; consumer sentiment; Earnings from: Chevron and Merck
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