Stocks' Earlier Gains Wane

All three major indices were backtracking midday from earlier gains as enthusiasm for dropping oil prices and a rise in April home sales dies down.
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Updated from 11:01 a.m. EDT

Stocks in the U.S. were losing their pep Tuesday as initially strong enthusiasm began to wane for dropping oil prices and positive new-home sales data.

The

Dow Jones Industrial Average

, which was up as much as 76 points this morning, deflated to a recent 17-point loss at 12,463 thanks in part to

General Motors

(GM) - Get Report

, its worst-performing component lately. The

S&P 500

was down a half-point to 1375.

The

Nasdaq Composite

managed to stay in the green, however, adding 9 points at 2453 as big technology stocks such as

Apple

(AAPL) - Get Report

,

Amazon.com

(AMZN) - Get Report

and

Google

(GOOG) - Get Report

gathered strength.

Equity measures got a bump earlier after the Commerce Department said sales of one-family homes in April jumped 3.3% -- from the prior month's downwardly revised figure -- to a seasonally adjusted annual rate of 526,000. That also represents an 42% drop from last year, but it's a bit better than the economists' consensus of 520,000. Also, the amount of time needed to clear through the current inventory is now estimated at 10.6 months, based on the current sales pace, down from 11 months in March.

On the other hand, prior to that, Standard & Poor's/Case-Shiller indicated that prices of U.S. homes tumbled 14.1% nationwide last quarter, a record decline for the 20-year-old index.

Also, the Conference Board's consumer-confidence numbers showed another decline to 57.2 in May from 62.8 in April -- worse than the measure of 60.0 sought by economists.

Traders were also digesting a

Financial Times

report that former

Federal Reserve

chairman Alan Greenspan believes the probability of a severe recession has "come down markedly," though he still thinks there's a greater than 50% chance the U.S. will fall into some level of recession.

Crude oil continued to lose ground, though futures were paring their losses recently, shedding $1.96 to $130.23 a barrel. That seemed to pressure the Dow's oil-and-gas components,

Exxon Mobil

(XOM) - Get Report

and

Chevron

(CVX) - Get Report

. Shares were off 1.1% and 1.4%, respectively.

Gold futures were losing $17.10 to $908.70 an ounce. The U.S. dollar firmed by 0.3% against the euro at $1.5728 and tacked on 0.6% against the yen to 103.96.

Back on the companies side,

Infineon Technologies

(IFX)

announced after the German market closed Monday that CEO Wolfgang Ziebart

has resigned

"due to different opinions on the future strategic orientation of the company." The chip company said Peter Bauer, a member of the management board, will assume the role of spokesman for that body. Shares were falling 5.2%.

Also departing will be the chief of Britain-based

Vodafone

(VOD) - Get Report

, which announced preliminary full-year adjusted operating profit that showed a 5.7% to $19.9 billion on a 14.1% jump in sales. CEO Arun Sarin will step down in July and be replaced by Vittorio Colao. The stock gave up 2.7%.

In the retail sector,

Borders Group

(BGP)

is due to report after the closing bell Tuesday.

Elsewhere, a Belgian business paper reported that

InBev

, a beer giant based in Belgium, could start merger negotiations with Budweiser purveyor

Anheuser-Busch

(BUD) - Get Report

as early as today. On Friday, the

Financial Times

said it was preparing a bid worth $46 billion, or $65 a share. Anheuser shares were hugging the flat line following Friday's sizable gains.

As for analyst actions, Bank of America and Bernstein each slashed second-quarter bottom-line estimates for

Lehman Brothers

(LEH)

,

Morgan Stanley

(MS) - Get Report

and

Goldman Sachs

(GS) - Get Report

, with each analyst citing concerns about more writedowns. BofA cut Lehman's target, in particular, to a loss from a prior profit expectation.

Shares of all three brokerages were backing off in recent trading.

Also on Tuesday, Citigroup upped

American Axle

(AXL) - Get Report

to buy from hold after Friday's news that striking workers at the company had finally voted to accept an amended employment agreement and go back to work. The three-month strike had idled several General Motors plants, as American Axle is one of GM's main parts suppliers.

GM, on the other hand, was cut to hold from buy at Citi. The automaker said Friday that the strike had cost it $1.8 billion before taxes in the second quarter. Axle shares moved up 1% as GM lost 3.9%.

Separately, KeyBanc Capital Markets upgraded oil-and-gas name

Newfield Exploration

(NFX)

to buy from hold, and

Knight Transportation

(KNX) - Get Report

was lifted to outperform at Wachovia. Shares were up 0.8% and 3%, respectively.

Treasury prices were falling. The 10-year note was off 12/32 in price to yield 3.89%, and the 30-year bond sank 25/32 in price, yielding 4.62%.

Foreign markets were mixed. The Nikkei 225 in Tokyo bounced 1.5% overnight, and Hong Kong's Hang Seng Index climbed by 0.6%. In Europe, however, the FTSE 100 slipped 0.5% and the Paris Cac surrendered 0.6%. Germany's Xetra Dax tiptoed 0.1% higher.