Stocks edge lower after consumer confidence report

MATTHEW CRAFT

AP Busi­ness Writer

NEW YORK — Major stock indexes dipped Tues­day as weak read­ings on con­sumer con­fi­dence gave investors lit­tle rea­son to extend the recent rally.

The Dow Jones indus­trial aver­age dropped 43.90 points to close at 13,197.73, a loss of 0.3 per­cent. Bank of Amer­ica fell 3.3 per­cent, the biggest drop in the Dow, after an ana­lyst down­graded the stock.

Major indexes opened higher, then pulled back after 10 a.m., when the Con­fer­ence Board said its index of con­sumer con­fi­dence slipped in March. Higher gas prices off­set the surg­ing stock mar­ket. Around the same time, the Fed­eral Reserve Bank of Rich­mond, Vir­ginia reported that a mea­sure of regional man­u­fac­tur­ing plunged this month.

Other indexes edged lower. The Stan­dard & Poor’s 500 index dropped 3.99 points to 1,412.52. The Nas­daq com­pos­ite fell 2.22 points to 3,120.35.

More than four stocks fell for every three that rose on the New York Stock Exchange. Trad­ing vol­ume was well below aver­age at 3.4 billion.

The S&P 500 index and the Nas­daq are up more than 1 per­cent for the week. The S&P 500 has already gained 12.3 per­cent to start the year. That three-month surge eas­ily beats the 8 per­cent return most fund man­agers hope to make in a whole year. The Nas­daq is up even more for the year, 19.8 percent.

Brian Gen­dreau, mar­ket strate­gist at Cetera Finan­cial, said the stock mar­ket still has room to go higher even after such a strong start. Com­pa­nies in the S&P 500 index are trad­ing for around 13 times their expected earn­ings over the next year, below the aver­age of 14.6 times over the past decade. And there’s plenty of cash still tucked away in the Trea­sury market.

“Com­pared to bonds, stocks remain very attrac­tive,” Gen­dreau said. “That doesn’t tell you if we’ll get a move in a week or a month from now, but it does tell you that there’s a lot of pent-up demand.”

Earn­ings from Lennar Corp. pulled hous­ing stocks up. The country’s third-largest builder reported quar­terly prof­its that beat ana­lysts’ esti­mates by deliv­er­ing more houses and pulling in more orders. Lennar rose 4.7 per­cent, the best gain in the S&P 500 index. Pul­te­Group rose 3.6 per­cent, D.R. Hor­ton 2.8 percent.

The eco­nomic reports on con­sumer con­fi­dence and regional man­u­fac­tur­ing helped push up prices in the U.S. gov­ern­ment debt mar­ket, where traders park funds when the econ­omy looks slug­gish. The 10-year Trea­sury note rose 53 cents for every $100 invested. The yield fell to 2.18 per­cent from 2.26 per­cent late Monday.

Demand for Trea­surys has pulled yields down from highs reached last week. The yield on the 10-year note touched 2.4 per­cent last Tues­day, the high­est yield since October.

Nat­ural gas prices fell again Tues­day on ris­ing sup­plies and warmer win­ter weather. Nat­ural gas futures fell 1.8 cents to $2.21 per 1,000 cubic feet. That’s near a 10-year low and half of what nat­ural gas fetched back in July.

Any money that con­sumers are sav­ing on nat­ural gas could wind up in the gaso­line tank. The national aver­age for reg­u­lar gaso­line in the U.S. is $3.90 per gal­lon. It’s risen 62 cents since Jan. 1.

Among stocks mak­ing big moves:

— Wal­green Co. rose 1.2 per­cent. The drug­store chain posted a drop in quar­terly earn­ings but the results still topped ana­lysts’ expectations.

— Apollo Group Inc. fell 8.5 per­cent, the biggest drop in the S&P 500. The for-profit edu­ca­tion com­pany reported a profit in the most recent quar­ter but issued a dim fore­cast. Apollo expects fewer stu­dents to enroll in the com­ing quarter.

— Ista Phar­ma­ceu­ti­cals Inc. leapt 7.8 per­cent on news that Bausch & Lomb plans to buy the drug maker for roughly $500 mil­lion in cash. Ista gets most of its rev­enue from Brom­day, an eye drop for patients recov­er­ing from cataract surgery. Bausch & Lomb plans to pay $9.10 per share for Ista, a 72-cent pre­mium over Monday’s clos­ing price. Bausch & Lomb is pri­vately held.

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