NEW YORK: Stocks shed gains and were little changed while US Treasury prices trimmed losses on Tuesday after a drop in consumer confidence in September caused investors to retreat to the sidelines.
The US dollar firmed against the yen, rallying from an eight-month low hit the previous day.
The unexpected fall in US consumer confidence, a possible precursor to slower growth, reflected worries about the worst job market in 26 years.
Despite a rise in US housing prices in July, the weakness of the consumer sector bodes ill for the year’s end, traditionally a period of spending and shopping.
Consumer spending accounts for two-thirds of economic activity, so the weak consumer confidence suggests it could take a long time before consumers contribute to growth. After a US stock market rally on Monday, investors took the economic data as an excuse to pause and take some profits.
“Investors seem to be looking for an opportunity to take profits and the consumer confidence numbers are the latest excuse to take a little bit off the table,” said Carmine Grigoli, chief US investment strategist in the equity division at Mizuho Securities USA Inc in New York. The Dow Jones Industrial Average was down 0.12 percent, while the Standard & Poor’s 500 Index and the Nasdaq Composite Index were flat.
MSCI world equity index was almost unchanged, up 0.1 percent. The FTSEurofirst 300 index of leading European shares rose 0.08 percent.
US data on housing prices in 20 metropolitan areas rose 1.6 percent in July, suggesting the domestic housing market was bottoming out, which in turn boosted home construction stocks.
“The housing market does seem to have found a base and prices seem to be in recovery, which is quite significant,” said David Sloan, Economist at 4CAST Ltd. in New York. US government bonds, a safe-haven asset, trimmed earlier losses after the weak economic data was released. The price on benchmark 10-year Treasury notes was briefly unchanged on the day at 102-29/32, rebounding from a session low of 102-11/32.
Europe’s main stock markets slipped on Tuesday as investors cashed in their gains from another rally of economic optimism, analysts said. London’s FTSE index of leading shares closed 0.12 percent lower at 5,159.72 points.
In Paris the CAC index fell 0.29 percent to 3,814.10 points and Frankfurt’s DAX fell 0.40 percent to 5,713.52. The DJ Euro Stoxx 50 index of top euro zone shares shed 0.19 percent to 2,893.75 points. Elsewhere in Europe, Amsterdam’s AEX index rose by 0.07 percent to 312.12 points, Madrid’s Ibex-35 fell 0.32 percent to 11,838.20 and the Brussels Bel-20 rose 0.02 percent to 2,490.78.
Milan’s FTSE Mib rose 0.37 percent to 23,565 points and the Swiss Market Index closed 0.44 percent higher at 6,319.72.
The dollar gained against the yen after Japanese Finance Minister Hirohisa Fujii appeared to backtrack on comments suggesting he was comfortable with the yen’s recent strength, adding he would not rule out taking action if currency moves were sharp and irregular. In his initial remarks after being appointed finance minister, Fujii had said he was comfortable with a strong yen given that the government intends to boost domestic consumption, prompting investors to buy the Japanese currency.
The dollar was up against a basket of major trading-partner currencies, with the US Dollar Index up 0.11 percent at 77.139 from a previous session close of 77.051.
The euro was down 0.36 percent at $1.4567 from a previous session close of $1.4619. Against the Japanese yen, the dollar was up 0.67 percent at 90.20 from a previous session close of 89.600.
Japan’s benchmark Nikkei stock index rose 90.68 points to 10,100.20. The index slid 2.5 percent the previous day to mark its lowest close since July 24.
