RTTNews - After seeing some volatility early on, stocks are posting moderate losses in early afternoon trading on Tuesday following a disappointing report on consumer confidence. The major averages are all in negative territory, more than offsetting yesterday's modest gains.

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.

Earlier, Standard and Poor's released a report showing that U.S. home prices continued to decline at a significant annual rate in the month of May, although the pace of decline in prices slowed for the fourth consecutive month.

In earnings news, Valero Energy (VLO), Amgen (AMGN) and Manitowoc (MTW) reported results that beat analyst estimates. On the other hand, Office Depot (ODP) fell well short of analyst forecasts. All of the firms reported revenues that failed to meet estimates, deflating the mood on Wall Street.

Meanwhile, IBM Corp. (IBM) announced that it has entered into a definitive agreement to acquire SPSS Inc. (SPSS). The all-cash transaction has a price of $50 per share, resulting in a total cash consideration of approximately $1.2 billion.

The major averages have seen some upside in recent trading, moving off of their worst levels of the day, although they remain in negative territory. The Dow is currently down 71.95 at 9,036.56, the Nasdaq is down 13.57 at 1,954.32 and the S&P 500 is down 9.91 at 972.27.

Sector News

The major sector indices are mostly in negative territory, contributing to the pullback being shown by the broader markets.

Some of the day's worst performances are being turned in by resource stocks, with gold, oil service, steel and natural gas stock falling by considerable margins. Notably, the Philadelphia Oil Service Index is down 4 percent, pulling back further off the one-month closing high it set last Friday.

The losses by gold, oil service, and natural gas stocks have been largely precipitated by decreases in the prices of the respective commodities.

Additionally, U.S. Steel (X) has contributed to the weakness in the steel sector, with the steel giant down 3.6 percent. The loss by U.S. comes after the company posted a second quarter loss compared to a profit in the same quarter last year, citing lower demand and prices for steel.

While utilities, railroad, brokerage and commercial real estate stocks are also sliding, health insurance and healthcare provider stocks are bucking the day's downtrend. The Morgan Stanley Healthcare Payor Index and the Morgan Stanley Healthcare Provider index are gaining by 5.8 percent and 2.6 percent, respectively, reaching fresh highs.

Stocks In The News

USEC Inc. (USU) is plummeting in early afternoon trading after the U.S. Energy Department denied the company's application for a loan guarantee to complete construction of the American Centrifuge Plant in Piketon, Ohio. The stock has plunged by 33.6 percent, falling to its worst intraday level in eight months.

Shares of Office Depot are also falling after the firm reported an adjusted second quarter loss of $0.22 per share, while analysts had expected a loss of $0.12 per share. Revenues dropped by 22 percent to $2.82 billion. The stock is down by 19.3 percent, backing off of its best level in well over nine months.

On the other hand, shares of Masco (MAS) are moving higher after the firm reported second-quarter net income of $0.15 per share, crushing analyst estimates that called for a loss of $0.01 per share. The stock has surged up by 12.6 percent, reaching its highest intraday price in nine months earlier in the day.

In Focus: Economic News, Earnings Data

As mentioned above, 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.

Lynn Franco, Director of the Conference Board Consumer Research Center said, Consumer confidence, which had rebounded strongly in late spring, has faded in the last two months.

Separately, Standard and Poor's said 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.

Also this morning, traders looked to earnings from entertainment giant Viacom (VIA), which 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.

Further, Amgen posted adjusted second quarter earnings that firmly beat expectations although revenues fell short of estimates. Manitowoc's adjusted second quarter earnings also surpassed analysts' forecasts, while revenues disappointed.

Other Markets

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 closed firmly on the downside, with the German DAX Index and the French CAC 40 Index finishing down by 1.5 percent and 1.2 percent, respectively, while the U.K.'s FTSE 100 Index slipped by 1.3 percent.

In the bond markets, treasuries continue to see strong gains following the day's consumer confidence data. Subsequently, the yield on the benchmark ten-year note is trading at 3.625 percent, falling by 8.8 basis points on the day.

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