U.S. stocks and exchange traded funds (ETFs) fell modestly in morning trading on discouraging economic news about consumer confidence, which showed that Americans are still feeling down about the state of the economy.
A report by the New-York based Conference Board reported that its consumer confidence darkened in July as worries of unemployment offset any enthusiasm from the rally in the markets. The Board’s Consumer Confidence Index fell to 46.6 from 49.3 in June – far from economists’ expectations of 49. To put it into perspective, a reading above 90 would signal that the economy is on solid footing.
On a positive note, there is more good news out of the real estate sector. The Case-Schiller Index, which tracks home prices in 20 of the nation’s largest metropolitan cities, rose for the first time since 2006. The index indicated that the value of U.S. homes grew 0.5% month over month and 13 of the 20 cities in the index showed gains. Unfortunately, the sector is still not completely in the clear: on an annual basis the index is down 17.1%. The news sent the MacroShares Major Metro Housing (UMM) up 2.3% in intraday trading.
In the earnings arena, United States Steel (X), reported a second-quarter loss as demand was badly hurt because of the global recession. The nation’s largest steel maker reported a loss of $2.92/share and beat Wall Streets expectations of $3.45/share.
Media giant Viacom (VIA) posted second quarter earnings of $0.49/share, a hair above the $0.48/share forecast by analysts. The company cited weakness in advertising and its filmed entertainment business as the causes of its 32% profit decline. The news sent the PowerShares Dynamic Media Portfolio (PBS) down 1% in morning trading; VIA is 5%.
