Stocks Fall After Jan. Consumer Confidence Fails to Keep Pace; Home Sales, Business Growth Also Lag

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Stocks reversed course this morning, giving back an early advance after a new report found consumer confidence fell during January as Americans grew less sure of their job prospects and rising gasoline prices worked to erode positive momentum.

The Conference Board measure of consumer attitudes about the U.S. economy was one of three reports today that failed to match expectations, with the private research group reporting its index of consumer attitudes slid to 61.1 this month from a revised 64.8 during December. The January reading was well below the 68.0 expected by economists surveyed by Dow Jones Newswires.

Also, the Institute for Supply Management-Chicago Inc. said business activity in the U.S. midwest retreated during January, with the business barometer falling to a 60.2 reading from 62.2 in December. The month-over-month decline ran counter to expectations, with economists forecasting a consensus 0.8% in polling by Bloomberg.

Readings above 50 signal growth. Projections ranged from 59 to 67.

Residential property prices also declined, falling a larger-than-expected 3.7% during the 12 months ended Oct. 31, 2010, according to the S&P/Case-Shiller index of property values in 20 U.S. cities released today. A 3.3% decrease was forecast by experts queried by Bloomberg.

Stocks were broadly higher early Tuesday, rising after euro zone leaders late yesterday agreed to more restrictive budget measures, a move championed by the European Central Bank. Greek Prime Minister Lucas Papademos also helped buoy attitudes, saying negotiators had made "significant progress" with creditors in efforts to restructure the country's debt and avoid a chaotic default. A definitive agreement remains possible by the end of this week, according to news reports.

In company news, ExxonMobil Corp ( XOM ) shares are lower today with the world's largest energy company reporting reported Q4 profit just ahead of expectations. XOM reported net earnings of $1.97 a share, up from a $1.85 EPS in the same period a year ago. Wall Street had been looking for a $1.96 a share gain.

RadioShack ( RSH ) plunged in early trading, establishing a new 52-week low, after late yesterday saying its Q4 EPS will be in the range of $0.11 to $0.13 per share, below the Street view of $0.37 per share, according to Thomson Reuters. Q4 sales should be $1.39 billion, the company said, better than the Street view of $1.35 billion.

Drug stocks are mixed with Eli Lilly ( LLY ) rising after reporting Q4 non-GAAP earnings of $0.87 a share, topping the Thomson Reuters mean analyst estimate for $0.78. Revenues also beat the Street view by wide margin despite a 2% decline from year-ago levels after patents for its Zyprexa and Gemzar medications expired.

But Pfizer Inc. ( PFE ) gave back its initial gains and was down nearly 1.5% in late morning trade. The world's largest drug company beat analyst expectations with a Q4 adjusted EPS of $0.50 -- topping the consensus view by $0.03, according to Thomson Reuters -- but also cutting its 2012 adjusted EPS guidance to $2.20 to $2.30 a share. PFE previously forecast a $2.25 to $2.35 a share profit. The Street is currently at $2.30, according to Thomson Reuters.

Commodities still are higher today but gave back most of their earlier advances following the disappointing consumer confidence data at 10 a.m. Crude oil for March delivery is up 23 cents to $99.01 a barrel after earlier reaching $101.29. Brent crude is at $111.29 a barrel, up 54 cents, after brushing against $113 this morning. February gold is trading $3 higher at $1,735.70 an ounce, nearly square in the middle of its session range. Natural gas extended its losses after the Conference Board report and is now down 19.3 cents to $2.519 per 1 million British Thermal Units.

Among precious metal ETFs, the Market Vectors Gold Miners ETF is down 89% to $55.96 with the SPDR Gold Trust down 32 0.19% at $168.35. The iShares Silver Trust is down 0.34% to $32.39.

Among energy ETFs, the United States Oil Fund is 0.08% to $38.04. The United States Natural Gas Fund is down 4.65% to $5.3780.

Here's where markets stand at mid-day:

NYSE Composite Index down 22.63 (0.29%) to 7,811.78.

Dow Jones Industrial Average down 84.76 (0.67%) to 12,568.96.

S&P 500 down 5.69 (0.43%) to 1,307.32.

NASDAQ Composite down down 12.49 0.44% 2,799.45.

GLOBAL SENTIMENT

Nikkei up 0.11%.

Hang Seng up 1.14%.

Shanghai Composite up 0.33%.

FTSE-100 up 0.29%.

MID-DAY NYSE INDEX WATCH

NYSE Energy down 80.04 (0.62%) at 12,755.18.

NYSE Financial down 3.90 (0.09%) at 4,382.39.

NYSE Health Care down 12.94 (0.18%) at 7,116.95.

NYSE Arca Tech 100 down 2.67 (0.23%) at 1,168.81.

UPSIDE MOVERS

(+) VRNG, (+30.2%) Social networking software firm releases new version of Facetones for Nokia phones.

(+) FFN, (+22.5%) Facebook application provider gaining ahead of expected IPO announcement.

(+) PRXL, (+18%) Tightens 2012 EPS range to $1.01 to $1.09, vs prior $0.99 to $1.14 view.

DOWNSIDE MOVERS

(-) KONA, (-14.0%) CEO steps aside for personal reasons, replaced by board member.

(-) MNKD, (-13.3%) Plans $50 million offering of equity units.

(-) CEVA, (-7.3%) Forecasts Q1 earnings of $0.20 to $0.22 per share, below $0.24 analyst consensus.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: LLY , PFE , RSH , XOM

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