* Consumer confidence falls, tempering optimism
* Higher home prices boost homebuilder stocks
* Dow off 0.5 pct; S&P 500 off 0.2 pct; Nasdaq off 0.3 pct
* For up-to-the-minute market news, click []
(Updates to close)
By Ellis Mnyandu
NEW YORK, Sept 29 (Reuters) - U.S. stocks fell on Tuesday
as a surprise drop in a gauge of consumer confidence
overshadowed signs of stabilization in housing and solid
earnings from Walgreen Co <WAG.N>.
With the third quarter drawing to a close, trading was
volatile and volume light.
Stocks started higher but then turned lower as the
Conference Board's Consumer Confidence Index for September
fell, defying forecasts and underscoring concerns about
personal finances amid the worst job market in 26 years. For
details, see []
Even so, investors were reluctant to sell stocks
indiscriminately. Major indexes spent most of the session
shuttling between small losses and break-even, one day after
the S&P 500 index rebounded to snap a three-day losing streak.
"You had a bit of mixed economic data and the market is a
little bit mixed too," said Cleveland Rueckert, market analyst
at Birinyi Associates Inc in Stamford, Connecticut. "There were
big gains yesterday, so it's not surprising to see a little bit
of a pullback, a little bit of a breather."
The Dow Jones industrial average <> dropped 47.16
points, or 0.48 percent, to 9,742.20. The Standard & Poor's 500
Index <.SPX> shed 2.37 points, or 0.22 percent, to 1,060.61.
The Nasdaq Composite Index <> dipped 6.70 points, or 0.31
percent, to 2,124.04.
Top drags included some of the stellar performers in
Monday's runup, including manufacturer 3M Co <MMM.N>, off 1.4
percent to $73.94 and network equipment maker Cisco Systems Inc
<CSCO.O>, down 1.3 percent at $23.30. Apple Inc <AAPL.O>
declined 0.4 percent to $185.38.
The semiconductor index <.SOXX> shed 1.4 percent after
rising 2.1 percent on Monday.
Retreating oil prices weighed on energy shares, with
Chevron <CVX.N> off 1.1 percent at $70.91. U.S. front-month
crude <CLc1> settled down 13 cents at $66.71 a barrel.
But shares of Walgreen jumped 9.2 percent to $37.35 after
the largest U.S. drugstore chain reported a quarterly profit
that topped expectations. The S&P food & drug retail industry
index <.GSPFDGR> rose 1.6 percent. []
The Dow Jones home construction index <.DJUSHB> rose 0.5
percent following an improved S&P/Case-Shiller home price index
reading that hinted at stabilization in the housing market.
Shares of Moody's Corp <MCO.N> and The McGraw-Hill
Companies Inc <MHP.N> jumped after Piper Jaffray analysts said
the rating agencies were in a favorable position as debt
issuance improved substantially in September year-over-year.
Moody's shares jumped 10.9 percent to $20.81 and
McGraw-Hill, parent of Standard and Poor's, rose 7.3 percent to
$26.11.
CIT Group Inc <CIT.N> shares rose 31 percent to $2.20 on a
report that hedge fund manager John Paulson was considering
merging the troubled U.S. finance company with failed mortgage
lender IndyMac Federal Bank <IDMCQ.PK>. [].
Window dressing -- when fund managers sell laggards in
favor of outperformers to spruce up portfolios -- tends to make
quarter-end trading volatile.
The S&P 500, up 15.4 percent so far this quarter, is making
a run for its best quarterly performance since the fourth
quarter of 1998. The benchmark index has rallied nearly 60
percent from the 12-year low of early March as investors bet on
the recovery and prospects for a rebound in corporate profits.
(Editing by Kenneth Barry)
