💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

US STOCKS-Wall St slides on confidence data; Q2 set to end up

Published 06/30/2009, 01:10 PM
Updated 06/30/2009, 01:18 PM

* Consumer confidence unexpectedly drops in June

* Falling crude prices sink energy shares

* Dow off 1.3 pct; S&P down 1.2 pct; Nasdaq off 0.8 pct (Updates to midday, changes byline)

By Rodrigo Campos

NEW YORK, June 30 (Reuters) - U.S. stocks fell on Tuesday after a surprising drop in consumer confidence sparked investor concern about spending and the strength of the economic recovery, even as the S&P 500 was set to close its first positive quarter in almost two years.

The Conference Board's measure of consumer confidence slid in June and hurt expectations for a recovery, as consumer spending accounts for roughly two-thirds of the U.S. economy.

The S&P energy index fell 1.5 percent as risk aversion resurfaced after the confidence data and helped lift the U.S. dollar. As a result, commodity prices fell.

"The market may have been getting a bit ahead of events in the last few days," said David Resler, chief economist at Nomura Securities International in New York.

"This is a wake-up call for the stock market that the economic recoveries typically move in fits and starts, and this kind of (move) in consumer confidence is a revelation that it is not all clear sailing from here."

Crude oil futures fell more than $2 per barrel and hit shares of companies in the sector. Services provider Schlumberger Limited fell 1.6 percent to $54.11, while Occidental Petroleum Corp lost 1.6 percent to $65.11.

The Dow Jones industrial average lost 109.28 points, or 1.28 percent, to 8,420.10. The Standard & Poor's 500 Index dropped 11.23 points, or 1.21 percent, to 916.00. The Nasdaq Composite Index fell 14.54 points, or 0.79 percent, to 1,829.52.

Despite today's decline so far, the broad S&P 500 is on track to wrap up its best quarter in at least six years.

On this last day of the second quarter, money managers are expected to burnish their portfolios by selling losing stocks and scooping up winners in a move that may add to volatility.

Analysts noted that a shortened trading week could also lead to increased volatility, as well as thinner volumes. U.S. markets will be shut for the U.S. Independence Day holiday on Friday.

In other economic news, separate reports showed U.S. single-family home prices fell in April but the pace of decline moderated, and business activity in the Midwest contracted again in June, but at a less severe rate than expected. (Reporting by Rodrigo Campos; Editing by Jan Paschal)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.