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Stocks mixed as weak housing news balances out a surge in consumer confidence; Sears plunges
NEW YORK (AP) ' Stocks were moving between small gains and losses Tuesday on mixed economic news. Consumer confidence surged to an eight-month high, but home prices dropped in major cities. Sears plummeted after reporting that it would close more than 100 stores around the country.
In the latest sign of a bumpy recovery in the housing market, home prices fell in 19 of the 20 cities tracked by the Standard & Poor's/Case-Shiller index. Atlanta, Detroit and Minneapolis posted the biggest declines. Prices in Atlanta and Las Vegas fell to their lowest points since the housing crisis began.
That report dampened investors' enthusiasm about a jump in consumer confidence to the highest level since April. The New York-based Conference Board reported that its Consumer Confidence Index rose almost 10 points to 64.5 in December. Economists watch the numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity.
Henry Herrmann, chief executive officer at the investment management firm Waddell & Reed, said the increase reflected the fact that more jobs have been created in recent weeks, which will likely lead to "a more sustained" economic recovery.
The Dow Jones industrial average was off 3 at 12,291 as of 11 a.m. Eastern. The S&P 500 was up less than a point at 1,265. The Nasdaq composite was off half a point at 2,618.
The stock market was closed Monday in observance of Christmas. Stocks are expected to trade within a narrow range this week as trading remains light.
The Dow average closed at a five-month high last week after a run of strong economic data in the U.S. However analysts expect any market gains to be tempered by worries over the European debt crisis.
Italy's borrowing costs rose Tuesday, reflecting investor anxiety. The yield on the country's ten-year bonds hit 7 percent again, a level that is considered unsustainable in the long run. Greece, Ireland and Portugal had to seek relief from their lenders after their own borrowing costs rose to that level.
Italy is the euro zone's third-largest economy and is considered too big to bail out. Mario Monti, the country's new premier, got parliamentary approval last week for a big austerity package that is intended to save the country from financial disaster.
Markets have grown increasingly fearful over the past few months that Italy will find it difficult to pay off its massive debts, which stand at around $2.5 trillion.
In corporate news:
' Sears Holding Corp. plunged 20 percent to $36.63, the most in the S&P 500, after the retailer announced plans to close between 100 and 120 Sears and Kmart stores after poor sales during the holidays, the most crucial time of year for retailers.
' U.S. oil and gas explorer Endeavour International Corp. rose 9 percent to $7 after the company announced an agreement to buy ConocoPhillips' interest in three U.K. oil fields in the Central North Sea for $330 million.
' MetLife Inc. rose 1 percent to $31.61 after saying it will sell its U.S. retail deposit business to GE Capital as it moves away from being a bank holding company.