SARA LEPRO
NEW YORK (AP) — Stocks reversed early gains Tuesday and moved lower after a private research group said consumer confidence unexpectedly fell in June.
Investors had been expecting the Conference Board's measure of consumer sentiment to hold steady following big jumps in April and May. Consumer confidence is closely watched because spending from consumers accounts for more than two-thirds of U.S. economic activity.
The Conference Board said its Consumer Confidence Index now stands at 49.3, down from 54.8 in May. Economists surveyed by Thomson Reuters had projected confidence would be virtually unchanged at 55.
After months of economic data showing that the recession was not getting worse, investors are hungry for signs that the economy is actually growing. Investors have grown weary and nervous that the economy's rebound won't be as robust as hoped.
Those concerns have stalled a three-month advance in the market that brought stocks up more than 30 percent off of 12-year lows reached in early March.
"We're seeing a lot of people getting concerned about the market," said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. "There has been a little lost leadership among certain groups."
The market still had a stellar quarter, with the benchmark Standard & Poor's 500 index rising 16.2 percent over the April-June period as of Monday's close. That would mark its best quarterly performance since a nearly 21 percent jump in the fourth quarter of 1998.
In midmorning trading, the Dow Jones industrials are down 97.49, or 1.1 percent, to 8,431.89 after earlier rising as much as 31 points. The S&P; 500 index fell 10.67, or 1.2 percent, to 916.56, while the Nasdaq composite index fell 11.96, or 0.7 percent, to 1,832.10.
About two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 241.4 million shares, compared with 191.5 million shares at the same time the previous day.
On Monday, a surge in oil prices drove energy, industrial and material stocks higher and helped push the Dow up nearly 91 points. The S&P; 500 index added 8 points, while the Nasdaq rose 5.
Investors have been more guarded as data shows much pain still exists in both the U.S. and economies around the world.
Earlier Tuesday, the Standard & Poor's/Case-Shiller index showed home prices in 20 major cities dropped by 18.1 percent from April 2008. The 10-city index fell 18 percent from the year before.
April marked the third straight month both indexes didn't set record price declines.
There was also disappointing news from abroad. Japan's unemployment rate jumped to a five-and-a-half year high in May, the government reported. Meanwhile, Britain said its economy shrank in the first quarter by more than originally reported — the worst drop in half a century.
Later this week, investors will get a key report on the manufacturing sector as well as the much anticipated monthly unemployment tally. Markets are closed Friday in observance of the Independence Day holiday.
Bond prices were slightly lower early Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.54 percent from 3.48 percent late Monday.
The dollar was higher against the euro and the British pound. Gold prices fell.
In other trading, the Russell 2000 index of smaller companies rose 2.33, or 0.5 percent, to 512.94.
Copyright 2009 The Associated Press.
