Stocks were eking out small gains Tuesday on mixed economic news. Consumer confidence surged to an eight-month high, but home prices dropped in major cities. Sears plummeted after reporting that it would close more than 100 stores around the country.
In the latest sign of a bumpy recovery in the housing market, home prices fell in 19 of the 20 cities tracked by the Standard & Poor's/Case-Shiller index. Atlanta, Detroit and Minneapolis posted the biggest declines. Prices in Atlanta and Las Vegas fell to their lowest points since the housing crisis began.
That report dampened investors' enthusiasm about a jump in consumer confidence to the highest level since April. The New York-based Conference Board reported that its Consumer Confidence Index rose almost 10 points to 64.5 in December. Economists watch the numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity.
Henry Herrmann, chief executive officer at the investment management firm Waddell & Reed, said the increase reflected the fact that more jobs have been created in recent weeks, which will likely lead to “a more sustained” economic recovery.
“If job creation will come with wage improvement in the coming weeks, it will boost confidence further,” Herrmann said.
The Dow Jones industrial average was up 17 points at 12,311 as of noon Eastern. The S&P 500 was up less than 2 points at 1,267. The Nasdaq composite was off 7 points at 2,626.
The stock market was closed Monday in observance of Christmas. Stocks are expected to trade within a narrow range this week as trading remains light.
The Dow average closed at a five-month high last week after a run of strong economic data in the U.S. However analysts expect any market gains to be tempered by worries over the European debt crisis.