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US stocks fall on decline in consumer confidence

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(GlobalPost/GlobalPost)

US stocks Tuesday opened flat but moved lower after a report showed a decline in consumer confidence in September.

About 50 minutes into trade, the Dow Jones Industrial Average dropped 55.16 points (0.36 percent) to 15,346.22.

The broad-based S&P 500 gave up 6.00 (0.35 percent) at 1,695.84, while the tech-rich Nasdaq Composite Index fell 9.72 (0.26 percent) to 3,755.57.

The Conference Board reported its consumer confidence index fell to 79.7 in September from 81.8 in August.

The weaker reading came amid concerns about the budget debate in Washington ahead of an October 1 deadline for Congress to enact new funding to run operations or face a government shutdown.

Investors are also anxious about the direction of monetary policy after the Fed's unexpected decision last week to keep its aggressive stimulus program at full-throttle.

A survey of home prices showed US single-family home prices continued to increase in July, but at a slightly slower monthly pace.

The S&P Case-Shiller 20-city composite home price index rose 1.8 percent from June, decelerating from June's 2.2 percent monthly increase.

Applied Materials, which makes tools to produce semiconductors and displays, surged 6.8 percent after announcing a plan to merge with Tokyo Electron to create a new firm worth $29 billion.

The combined company is expected to yield a total of $750 million in cost synergies within the first three years.

Homebuilder Lennar rose 2.4 percent after earnings came in at 54 cents per share, nine cents above expectations. The company also reported a 32 percent rise in backlog, while pointing to a long-term outlook that "remains extremely bright."

KB Home, another homebuilder, tacked on 0.2 percent after earnings bested expectations by nine cents at 30 cents per share, even as revenues fell a bit short of forecasts. KB also sees a strong long-term market, but said the recent rise in interest rates had resulted in a "slower pace of the recovery."

Red Hat, a developer of cloud computing systems and other technologies, sank 11.9 percent after earnings narrowly bested expectations, but billings fell short of the level expected by some analysts. Deutsche Bank said it was "cautious" on the company "as momentum slows" to "the lowest in 17 quarters."

Bond prices rose. The yield on the 10-year Treasury dipped to 2.68 percent from 2.71 percent Monday, while the 30-year fell to 3.71 percent from 3.75 percent. Prices and yields move inversely.

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http://www.globalpost.com/dispatch/news/afp/130924/us-stocks-fall-decline-consumer-confidence