RTTNews - Following a modest uptick seen the start of Tuesday's session, stocks turned negative as traders reacted to some disheartening consumer confidence figures. The major averages continue to post notable losses, but the downside seems to have been limited by another low volume outing amid the holiday shortened trading week.

Prompting some of the day's pessimism was a report from the Conference Board that showed an unexpected deterioration in consumer confidence in the month of June, reflecting less favorable assessments of both current economic conditions and the near-term outlook.

In an interview with RTT News, Ken Goldstein, an economist at the Conference Board discussed the surprise decline in consumer confidence in June. Consumers got a little bit ahead of themselves and pulled back a bit, he stated.

However, he advised to not lose focus of the fact that overall consumer confidence is much higher here in June than it was back in February and March.

Goldstein said consumers still see the light at the end of the tunnel and confidence will translate into spending, adding that By October/November, we might actually be talking about recession in past tense.

The major indices have extended their stay in negative territory, moving essentially sideways in recent trading. The Dow is currently down 108.07 at 8,421.31, the Nasdaq is down 15.90 at 1,828.16 and the S&P 500 is down 11.37 at 915.86.

Dow Components

Nearly all of the Dow components are in negative territory in mid-afternoon trading, contributing to the triple digit loss being shown by the blue chip index.

The Dow is being dragged down by shares of Caterpillar (CAT), which are sliding by 4.9 percent. Despite the notable pullback, the stock remains stuck in a two month trading range.

Communications giant Verizon (VZ) is also pulling back on the day, dropping by 2.3 percent. The day's decline is dragging the stock well off its best closing price in well over two months reached in the previous session.

Further, shares of Pfizer (PFE), Procter & Gamble (PG), American Express (AXP), and Cisco (CSCO) are all posting losses ranging between 2 and 3 percent. Even though the stocks are ceding considerable ground, they continue to bounce around in their respective trading ranges.

The only Dow component currently in positive territory is McDonald's (MCD), which is posting a modest gain of 0.3 percent.

Sector News

Resource stocks are continuing their pullback, with gold, steel, and oil service stocks all continuing to see notable losses. The slide by gold and oil stocks comes as their related commodities prices have fallen on the NYMEX.

Further weakness is visible in healthcare provider stocks, as reflected by the 2.4 percent drop being shown by the Morgan Stanley Healthcare Provider Index. The day's decline has the index poised to snap four straight days of gains while remaining in a two-month trading range.

The index is being pulled lower by shares of MedCath (MDTH), which is down by 4.7 percent on the session. With the retreat, the stock is pulling back further off its best closing price in well over seven months set on Monday.

Other stocks that continue to see notable losses on the day include airline, banking, and brokerage stocks. The NYSE Arca Airline Index and the Kbw Banking Index are down by 2.7 percent and 1.7 percent, respectively.

In Focus: Economic Data, Corporate News

As mentioned above, the Conference Board said its consumer confidence index fell to 49.3 in June from a revised 54.8 in May. The decrease surprised economists, who had expected the index to edge up to 55.3 from the 54.9 originally reported for the previous month.

The ISM - Chicago said its index of activity in the manufacturing sector jumped to 39.9 in June from 34.9 in May, although a reading below 50 indicates a continued contraction. Economists had been expecting the index to increase to a reading of 39.0.

Earlier, the S&P Case-Shiller Index, a closely watched measure of home prices, showed a 0.6 percent decline from March to April, according to a survey of prices in 20 U.S. cities. This represented a drop of 18.1 percent compared to the same period last year.

On the corporate front, chipmaker Broadcom (BRCM) announced that it raised its tender offer to acquire all of the outstanding shares of common stock of Emulex (ELX) to $11.00 per share in cash, representing a total equity value of about $912 million. Emulex said that its Board of Directors would review the terms of the revised offer.

In earnings news, private education firm Apollo Group (APOL) reported third quarter net income of $1.26 per share, compared to $0.85 per share in the prior year quarter. The earnings beat Wall Street analyst forecasts of $1.12 per share.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended Tuesday's session on a mixed note. Japan's benchmark Nikkei 225 Index closed up by 1.8 percent, while Hong Kong's Hang Seng Index slid 0.8 percent.

Meanwhile, the major European markets closed firmly on the downside, with the German DAX Index and French CAC 40 Index finishing down by 1.6 percent and 1.7 percent, respectively. The U.K.'s FTSE 100 Index also fell, showing a decrease of 1 percent.

In the bond markets, treasuries are seeing a lack of conviction, lingering near the unchanged mark in recent trading. Subsequently the yield on the benchmark ten-year note is trading at 3.494 percent, seeing a climb of less than a basis point on the day.

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