Earnings Consumer Woes Weigh On Wall Street – US-FOREX.US
The first monthly increase in a key measure of home prices since 2006 could not shore up a rocky Street Tuesday, and the major averages made fresh lows heading into the afternoon.A disappointing reading on consumer confidence and second-quarter losses from commodity-related names like U.S. Steel
and Valero Energy
weighed on equity prices, sapping any enthusiasm for the latest S&P/Case-Shiller home price index. The report’s 20-city measure found prices were up 0.4% in May from the prior month, but the increase was tempered with the reminder that prices were still down 17.1% from 2008 and more than 32% from their 2006 highs.Investors appeared more concerned with the latest consumer figures from the Conference Board, which said its confidence gauge came in at 46.6 for July, down from June’s 49.3. By noon, the Dow Jones industrial average was down 78 points, or 0.9%, to 9,031; the S&P 500 was off 10 points, or 1%, to 972; and the Nasdaq lost 15 points, or 0.8%, to 1,953.Fewer orders, lower prices and carrying costs from idled factories contributed to a second-quarter loss of 2.92 a share for U.S. Steel. The figure was slimmer than expected, but shares of the metal producer still lost 1.68, or 4.1%, to 39.59.Valero Energy dropped 72 cents, or 3.8%, to 18.05, as investors considered the refiner’s second-quarter red ink. Poor margins resulted in the shutdown of an Aruba refinery and were a prime cause of the company’s loss of 48 cents a share.Aside from earnings, the corporate sector was also home to deal news Tuesday, with high-profile acquisitions in telecom and technology. Sprint Nextel
announced plans to acquire Virgin Mobile USA in a deal it valued at 483 million, giving it a larger presence in prepaid cell phones, while IBM
said it will buy Chicago business software outfit SPSS
for 1.2 billion.
Shares of Sprint were down 14 cents, or 3.1%, to 4.41 Tuesday, while IBM lost 1.03, or 0.9%, to 116.60. SPSS, which makes software that helps businesses predict consumer reactions and identify trends, shot up 14.22, or 40.5%, to 49.31.