Dow ends mixed on weak consumer confidence report

NEW YORK (AP) — News that US consumers are more pessimistic put the stock market’s rally on hold.

Stocks closed mixed Tuesday after three days of big gains. The Dow Jones industrial average rose 12 points for its fourth straight advance, but the gain was largely to due a jump in DuPont Co. after the chemical maker reported strong earnings. Broader market indexes fell slightly, and there were more losers than gainers on the New York Stock Exchange.

The Dow rose 12.26, or 0.1 percent, to 10,537.69 after gaining 405 points the past three days on strong earnings and forecasts. The Dow has surged in July, rising almost eight percent. The sharp gains helped push the index back into the black for the year on Monday.

The Conference Board’s report that its Consumer Confidence Index fell to 50.4 from June’s revised reading of 54.3 distracted investors from another batch of upbeat earnings reports. The market had expected the index to come in at 51.

Consumer confidence has fallen in recent months as people have waited in vain for a turnaround in the job market. That has made many consumers hesitant to spend and in turn raised concerns about the economic recovery. Most retail stocks fell after the confidence number was released.

Companies have a very different take on the economy from consumers. Chemical maker DuPont on Tuesday joined the growing number of big corporations that have raised their earnings forecasts. DuPont also easily beat analysts’ predictions for its second-quarter profit and revenue. The company’s stock rose $1.39, or 3.6-percent, to $40.38, and accounted for 10.52 points of the Dow’s advance.

Investors have been torn over the past few months between buying on companies’ upbeat reports and selling on government and private sector numbers that keep pointing to a slowing of the economy.

“Investors are really uncertain whether to focus on the underlying economy or earnings,” said Tyler Vernon, principal and portfolio manager at Biltmore Capital Advisors.

Although earnings had investors’ attention the past two weeks, the occasional economic number like Tuesday’s consumer confidence survey can trump companies’ results, Vernon said. When earnings reports are done, unsettling data on jobs, housing and consumer spending will dominate trading, and may well lead to more selling.

“I don’t know what turns around confidence aside from jobs growth,” Brady said.