The latest batch of mixed economic data is making it difficult for stocks to find direction.
Stocks wavered in a narrow range in early afternoon trading Tuesday after reports showing a larger-than-expected decline in consumer confidence and a third straight monthly increase in home prices.
The back-and-forth trading came after a big jump in stocks on Monday that broke a three-day streak of losses triggered by disappointing economic data.
Recent mixed signals on the economy have many investors believing that any recovery will be fitful at best. With the benchmark Standard & Poor’s 500 index up 57.1 percent since hitting a 12-year low in March, analysts say investors are using the mixed data as an excuse to sell some of their holdings.
“The market’s a little skittish,” said Howard Ward, portfolio manager at GAMCO Growth Fund, whose portfolio is concentrated in areas most sensitive to the economy, including technology, energy and financial stocks. “The data is inconsistent, so there will be the occasional economic release that is going to trigger some selling because stocks are up a lot.”
Investors were disappointed that the Conference Board’s consumer confidence index fell to 53.1 in September. That was down from 54.5 in August and much lower than the reading of 57 that economists had been expecting.
The private research group attributed the decline to concerns about the labor market, saying consumers are still worried about losing their jobs. Consumer confidence has been a key focus for the stock market in recent months, and many analysts say a true turnaround in the economy can’t occur until consumers start spending again and employers create more jobs.
The consumer confidence data, however, was tempered by an increase in home prices, the latest encouraging sign for the troubled housing sector. The Standard & Poor’s/Case-Shiller home price index of 20 major cities showed home prices rising 1.2 percent in July from June, marking the third straight month of increases.
The Dow Jones industrials fell 4.98, or 0.1 percent, to 9,784.38. The Standard & Poor’s 500 index rose 1.65, or 0.2 percent, to 1,064.63, and the Nasdaq composite index slipped 0.73, or 0.03 percent, to 2,130.01.
About four stocks rose for every two that fell on the New York Stock Exchange, where volume came to 576.7 million shares, compared with 457.6 million shares traded at the same time on Monday.
In other trading, the Russell 2000 index of smaller companies rose 0.47, or 0.1 percent, to 613.69.
Stocks jumped Monday as news of large takeovers by Xerox Corp. and Abbott Laboratories brought hope that corporate dealmaking could be making a comeback. That would be a big positive not only for the economy but also for the stock market as investors try to figure out which companies could become acquisition targets.
Analysts have been saying that some pullback in stocks is healthy considering how far and how fast the market has risen. But so far, any breaks in the advance have been fairly mild and brief, as investors who don’t want to miss an opportunity to join in the market’s climb higher keep the momentum going.
Still, the market could sell off more if reports continue to fall short of expectations. Despite better signs on manufacturing and home sales, the labor market remains beaten down. Investors will get the latest news on employment on Friday when the Labor Department releases its monthly jobs report, one of the most closely watched economic reports on the calendar.
Oil prices continued their decline Tuesday on the growing belief that the economy won’t be strong enough to lift demand as much as expected. Oil had been steadily rising in recent months on expectations that the economy was going to be stronger, therefore pushing demand higher.
Crude fell 27 cents to $66.57 on the New York Mercantile Exchange.
Meanwhile, bond prices mostly fell after five days of gains. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.29 percent from 3.28 percent late Monday.
The dollar was mixed against other major currencies, while gold prices fell.
Overseas, Japan’s Nikkei stock average rose 0.9 percent. Britain’s FTSE 100 fell 0.3 percent, Germany’s DAX index lost 0.5 percent, and France’s CAC-40 slipped 0.3 percent.