NEW YORK (TheStreet) -- It was a morning of surprises as consumer confidence unexpectedly dropped and third-quarter GDP made an unanticipated jump.
U.S. stocks slipped from session highs on Tuesday after November consumer confidence fell to 88.7, down from 94.1 in October and far lower than economists' forecasts for an increase to 96. Hopes were high that recent declines in oil prices would fuel increased consumer spending.
The data overshadowed better-than-expected revisions to GDP earlier Tuesday. Third-quarter GDP was upwardly revised to 3.9% from an initial reading of 3.5%, topping even the most generous estimates. Economists surveyed by Bloomberg predicted a range of 3% to 3.8% with a consensus of 3.3%.
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"Hearty, positive revisions in nearly all key categories of growth [suggested] the economy was on firmer footing than originally expected at the start of the second half," Sterne Agee's chief economist Lindsey Piegza wrote in a note.
However, this might not be what investors want to hear given that a better economy could trigger the Federal Reserve to raise interest rates sooner than expected. "Good news on GDP was actually negative for equity investors," Chris Gaffney, senior vice president at Everbank, said in a call. "Stronger U.S. economy worries investors in that they believe that interest rates will start rising sooner."
"This report may push the Fed to raise rates a little sooner than what they had planned, although I think they're focusing still on wage inflation. That's going to be the trigger for them to start raising rates," he added.
The housing market wasn't showing such strength as the overall economy. Home prices continued to soften in September, rising 4.9% across 20 metropolitan areas from 5.6% a month earlier, according to the S&P/Case-Shiller composite index. The result came in slightly better than an expected 4.7% increase.
The S&P 500 fell 0.16% and the Dow Jones Industrial Average slipped 0.08%. The Nasdaq slid 0.01%.
European markets were all higher after Germany posted modest economic growth. The region's largest economy reported third-quarter GDP growth of 1.2%, unrevised from the officials' previous estimates. Germany's DAX was 0.74% higher.
Apple (AAPL) rose Tuesday while its market cap topped $700 billion. Shares rose 0.52% to $119.25.
Netflix (NFLX) was 2.9% lower on a downgrade to "hold" from Stifel analyst Scott Devitt. "We ... view shares as more attractive in the low-$300 range until we gain more clarity on domestic subscriber growth trajectory," Devitt wrote in a report.
Footwear retailer DSW (DSW) reported a 7% jump in revenue and beat profits estimates, sending shares 1.8% higher. Cloud-based software developer Workday (WDAY) fell 6% after providing fourth-quarter guidance in line with expectations.
Tiffany (TIF) added 2.4% on Tuesday after quarterly comparable-store sales spiked 6%. Campbell Soup (CPB) climbed 0.85% after exceeding quarterly expectations on its top- and bottom-lines, while Hormel Foods (HRL) slid 4.2% after profit fell short of estimates.
Spain-based bank Santander (SAN) was gaining 1.3% after naming its former chief financial officer to the vacated role of CEO. Former chief Javier Marin had held the position for less than two years.
-- Written by Keris Alison Lahiff in New York.