Stocks Sell Off as Consumer Data Disappoint - TheStreet

NEW YORK (TheStreet) -- Blue-chip stocks finished with a triple-digit drop Tuesday, as weaker-than-expected February consumer confidence figures spooked investors about the nation's fragile economic recovery.

The

Dow Jones Industrial Average

lost 101 points, or 1%, to 10,282, and the

S&P 500

shed 13 points, or 1.2%, at 1095. The

Nasdaq

declined 29 points, or 1.3%, at 2213.

>>Top 5 Fast-Growth Stocks With 'Buy' Ratings

The slide was felt across a slew of sectors, highlighted by losses in financials, materials, energy and chips. The KBW Bank Index, Philadelphia Gold and Silver Index, the NYSE Arca Oil Index and the Philadelphia Semiconductor Index slumped 2.4%, 3.4%, 1.6% and 2.8%, respectively.

Bank stocks were hurt by news that the FDIC's "problem bank" list

swelled to 702 at the end of last year after hitting 552 in September.

Alcoa

(AA) - Get Report

,

American Express

(AXP) - Get Report

,

JPMorgan Chase

(JPM) - Get Report

,

Caterpillar

(CAT) - Get Report

and

Intel

(INTC) - Get Report

were the Dow's biggest decliners, each slipping over 2% today.

Stocks were mixed in the morning session, then dropped when the Conference Board's Consumer Confidence Index fell to 46 in February -- the lowest level in 10 months. The Conference Board upwardly revised January's level to 56.5. Economists had been looking for a reading of 55, down from January's originally reported level of 55.9.

Michael Strauss, chief economist at Commonfund, believes several factors were likely behind the weak consumer confidence figure. Namely, the survey was conducted as sovereign debt issues unfolded in Europe, the equities market was stumbling and unusually bad weather hit places not accustomed to it.

"The market was grappling with three factors that aren't normal economic factors," Strauss said. "The oddity of this number being so weak on the labor side is that we don't see it showing up in other statistics. Normally, when you get big moves in consumer confidence that are meaningful, then you see it show up in other data. My feeling is that you'll see this number reverse in subsequent months."

The dismal consumer picture comes as Washington has been increasingly focused on improving the labor market to assist economic recovery.

The House Financial Services Committee is holding a hearing today to examine the need for

additional stimulus to encourage job growth. The hearing comes a day after the Senate's version of a jobs bill passed a key procedural hurdle with bipartisan support.

James Dailey, senior portfolio manager of Team Asset Strategy Fund, sees little potential to lift market sentiment.

"I think skepticism about the job market is so pervasive at this point that until we see initial claims drop to the 400,000 range, I think the skepticism will remain," Dailey said. "Plus, I think investors understand that the government doesn't have much influence on job creation. It's a cyclical thing."

Investors are also looking ahead to Wednesday, when

Federal Reserve

Chairman Ben Bernanke will appear before the House Committee on Financial Services to present the Fed's semiannual economic and monetary policy report.

Earlier, housing data also proved disappointing, as home prices in 20 cities slipped 0.2% in December, according to the Standard & Poor's Case-Shiller Index. The U.S. national home price index is down by 2.5% in the fourth quarter from a year ago. Homebuilders were trading weaker across the sector with

Lennar

(LEN) - Get Report

,

KB Home

(KBH) - Get Report

and

Pulte Home

(PHM) - Get Report

all down by more than 3% each.

Shares of

Toyota

(TM) - Get Report

fell 1.9%, as the company's U.S. President James Lentz testified to Congress about the carmaker's response to the crisis.

In earnings news,

Home Depot

(HD) - Get Report

swung to a fourth-quarter profit and increased its dividend for the first time since 2006. The stock was the Dow's top gainer, up 1.4%, to $30.75.

Shares of

Target

(TGT) - Get Report

traded 1.2% lower after the retailer reported a fourth-quarter profit that nearly doubled, but sales missed estimates.

Macy's

(M) - Get Report

easily beat analysts' expectations for earnings of $1.32 a share with an adjusted profit of $1.40 a share. The retailer said it expects sales growth of 1% to 2% this year. The stock added 1.1%.

Office Depot

(ODP) - Get Report

,

Medco Health

(MHS)

and

Sears

(SHLD)

also surpassed top-line expectations.

The greenback was trading higher against a basket of currencies, with the dollar index ahead by 0.5%.

Late Tuesday, the American Petroleum Institute reported a surprising 3.14 million barrel drawdown in crude stockpiles last week, according to

Bloomberg

. The showing was better than forecasts from Platts calling for a 2 million-barrel build. The government's Energy Information Administration will report its numbers Wednesday morning.

Crude oil for April delivery traded $1.45 lower to settle at $78.86 a barrel, and the April

gold contract shed $9.90 to settle at $1,103.20 an ounce.

The U.S. Treasury's $44 billion auction of two-year notes had a high yield of 0.895% and a bid-to-cover ratio of 3.33.

The benchmark 10-year Treasury strengthened 29/32, diluting the yield to 3.687%, and the two-year note rose 3/32, weakening the yield to 0.838%.

-- Written by Melinda Peer and Sung Moss in New York

.