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Stocks Finish Flat on Consumer Confidence, Housing Data


NEW YORK ( TheStreet) -- Stocks closed mixed after a drop in the last minutes of trading as investors weighed downbeat housing numbers against improving U.S. consumer confidence.

The Dow Jones Industrial Average and S&P 500 were little changed. The Dow closed down 2.6 points, or less than 0.1%, at 12,291 after slipping in the final minutes of trading. The S&P 500 gained 0.1 point, or less than 0.1% to 1,265 and the Nasdaq advanced 6.5 points, 0.3%, to 2,625.

U.S. consumer confidence spiked more than forecast to 64.5 in December, from 55.2 last month, according to the Conference Board. The average economist estimate was for an increase to 58.3, according to Thomson Reuters, reflecting an improving U.S. jobs market. Higher confidence bodes well for consumer spending, which accounts for two-thirds of the U.S. economy.

Energy stocks gave the broader market a boost as oil futures broke above $100 a barrel. February futures for crude settled up $1.66 at $101.34 on the back of stronger demand and tensions in the Middle East after Iran threatened to block the Strait of Hormuz. Chevron (CVX) was among the Dow's leading gainers, climbing 0.5% to $107.98. The iShares S&P Global Energy Sector (IXC) exchange-traded fund was up 0.1%.

Weighing on market sentiment, however, was a report suggesting housing market recovery will remain sluggish. The S&P/Case-Shiller 20-city index of national home prices fell 1.2% in October. Economists had expected to see only a 0.4% drop for the month, according to Thomson Reuters.

"The week opened with one of the most uninspired trading sessions in three-years in terms of volumes," Ian Lygen, market strategist with CRT Capital Group, wrote in a note. "This action came despite the sharp upside surprise in Consumer Confidence - not to suggest that the data was irreverent, but rather that there was no one around to trade it."

U.S. corporate and economic news is expected to be light with four sessions left in the year. Many on Wall Street are taking advantage of two back-to-back long weekends.

Headlines from Europe may ease before resurfacing in early 2012, although investors are closely watching news out of Italy. Yields on Italian 10-year bonds are close to 7%, indicating nervousness ahead of a series of Italian debt auctions Wednesday. How successful the auctions are will reflect the market's confidence in Italy's ability to solve its debt problems as well as the overall state of the eurozone debt crisis.

Some European and Asian markets, including the U.K. and Hong Kong, were still closed Tuesday. Germany's DAX climbed 0.2% and Japan's Nikkei Average settled 0.46% lower. The Bank of Japan said on Monday that economic risks have increased, citing the European debt crisis and the yen's appreciation.

U.S. equities gained last week, in part driven by holiday exuberance. Investors were comfortable with news from Europe and were able to focus on improving economic news out of the U.S. as well as a small political breakthrough in Washington D.C. over the payroll tax holiday. The Dow was up 3.6%, the S&P 500 advanced 3.7%, and the Nasdaq gained 2.5%. The Dow and S&P 500 are on track for a positive year, while the Nasdaq is still lagging in the negative.

In corporate news, Nasdaq component Sears Holdings (SHLD - Get Report) plummeted 27% to $33.38 after the company said it plans to close 100 to 120 stores of its almost 2,200 Kmart and Sears stores, after struggling with sales in the third quarter. Same-store sales dropped 5.2% in last quarter, according to the company on Tuesday. Sears aims to reduce expenses, adjust its asset base and transform its business model, said CEO Lou D'Ambrosio.

Amsterdam-based ING (ING - Get Report) gave up plans to sell its Belgium insurance division amid a volatile stock market. The company hired JP Morgan to explore buyers but decided not to move forward after the bids coming in were too low. The business will to be added to the European-Asian insurer that ING is preparing to list on the stock market. Shares declined 1.3% to $7.34.

GE Capital will acquire the depository business of MetLife Bank (MET - Get Report)in a deal worth about $7.5 billion. The deal is part of MetLife's plan to move away from being a bank holding company. MetLife, a global provider of insurance, said it hopes the deal to close in the second quarter of 2012. Shares of MetLife increased 0.3% to $31.20, while General Electric (GE - Get Report) decreased 1.2% to $18.01.

Shares of Mead Johnson (MJN - Get Report) surged 5.8% to $69.08 on news that samples of its Enfamil formula involved in an U.S. Food and Drug Administration investigation did not contain a harmful bacteria to infants. The FDA had started an investigation after the death of a 10-day-old newborn, who consumed formula from a 12.5 ounce can of Enfamil.

Perfumania Holdings (PERF - Get Report) slipped 33% to $13.14 after agreeing to buy Parluz Fragrances (PARL) for about $170 million. Parluz soared 71% to $5.94.

This afternoon, former United States Securities and Exchange Commission attorney Willie Briscoe began an investigation into the sale with the firm Powers Taylor. "The investigation centers on whether Parlux shareholders are receiving adequate compensation for their shares in the buyout," according to a statement from Powers Taylor.

The dollar index lost 0.23%. The benchmark 10-year Treasury fell with the yield at 2.019%. February gold futures slid $10.50 to $1,595.50 an ounce.



-- Written by Kaitlyn Kiernan in New York.



>To contact the writer of this article, click here: Kaitlyn Kiernan

To follow the writer on Twitter, go to @Kaitlyn_Kiernan.

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