RTTNews - Stocks are moving to the downside in mid-morning trading on Tuesday, as traders react to the release of a report showing a further deterioration in consumer confidence. The major averages are all in negative territory, although upbeat housing price figures have limited some pessimism.
On the economic front, consumer confidence deteriorated by more than expected in the month of July, according to a report released by the Conference Board this morning. The decrease reflected less favorable assessments of both current conditions and the near-term outlook.
The Conference Board said that its consumer confidence index fell to 46.6 in July from an unrevised 49.3 in June. Economists had been expecting a much more modest decline by the index to a reading of about 49.0.
Earlier, Standard and Poor's released a report showing that although U.S. home prices continued to decline at a significant annual rate in the month of May, the pace of decline in prices slowed for the fourth consecutive month.
The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 17.1 percent in May compared to the 18.1 percent decrease reported for April. Economists had expected the report to show that prices fell 17.9 percent year-over-year.
In earnings news, traders were presented with earnings that largely beat on the bottom line by means of cost cutting but failed to meet revenue estimates.
Entertainment giant Viacom (VIA) reported adjusted second quarter earnings of $0.49 per share, compared to $0.64 in the previous year. While earnings came in-line with Wall Street analysts, revenues came in at $3.3 billion, well short of expectations of $3.5 billion.
Meanwhile, Office Depot (ODP) revealed an adjusted second quarter loss of $0.22 per share, compared to earnings of $10 million or $0.04 per share a year ago. The loss was wider than analyst estimates of a loss of $0.12 per share. Revenues dropped by 22 percent to $2.82 billion.
Further, Amgen (AMGN) posted adjusted second quarter earnings that firmly beat expectations although revenues fell short of estimates. Manitowoc's (MTW) adjusted second quarter earnings also surpassed analysts' forecasts, while revenues disappointed.
In recent trading, the major averages have moved off their lows for the session, although they currently remain firmly negative. The Dow is currently down 41.26 at 9,067.25, the Nasdaq is down 9.33 at 1,958.56 and the S&P 500 is down 7.12 at 975.06.
Stocks Driven By Analyst Comments
Shares of Lennar (LEN) are retreating in mid-morning trading after Citigroup downgraded the firm from Buy to Hold based on recent valuation. The stock is down by 5.1 percent, backing off of its best closing price in over nine months.
Ericsson (ERIC) is also pulling back following a downgrade by UBS, which lowered its rating on the company's stock to Sell from Neutral. Shares of the communications firm are falling by 1.7 percent, backing off of the more than nine-month closing high set late last week.
On the other hand, shares of Domtar (UFS) are moving higher after Deutsche Securities upgraded the Canadian paper firm from Hold to Buy. The stock is up by 7 percent, reaching its best intraday level in nearly six weeks.
In overseas trading, stock markets across the Asia-Pacific region finished largely on the upside on Tuesday. Australia's All Ordinaries Index and Hong Kong's Hang Seng Index posted gains of 1.5 percent and 1.8 percent, respectively, although Japan's benchmark Nikkei 225 Index closed little changed.
Meanwhile, the major European markets are moving to the downside, with the German DAX Index and the French CAC 40 Index falling by 0.7 percent and 1.2 percent, respectively, while the U.K.'s FTSE 100 Index is down by 0.9 percent.
In the bond markets, treasuries have moved notably higher following the day's consumer confidence data. Subsequently, the yield on the benchmark ten-year note is trading at 3.7 percent, falling by 4.7 basis points on the day.
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