Bank stocks fell but thrift stocks rose in a relatively quiet session Tuesday that featured bad news about consumer confidence and home prices.
The American Banker index of 225 bank stocks fell 0.5% and the index of the top 50 banks fell 0.7%, but the thrift index rose 2.7%. The Dow Jones industrial average fell 0.1% and the Standard & Poor's 500 rose 0.2%.
Stuart Simpson, an equity trader at First Horizon National Corp.'s FTN Midwest Research Securities Corp., said Tuesday's 16-point decline for the Dow was the smallest point move in three weeks. There were "not a whole lot of big movers necessarily today," he said. "We're approaching earnings season, so it might be quiet going into that."
The Consumer Confidence Index reached a five-year low in March, dropping 15.6% from a month earlier, to 64.5.
The Expectations Index fell 17.4%, to 47.9, a 35-year low similar to the levels the country reached during the oil embargo and Watergate.
The Present Situation Index dropped 14.2% from a month earlier, to 89.2 in March, which indicates that the pace of growth has slowed.
"Consumers' outlook for business conditions, the job market and their income prospects is quite pessimistic and suggests further weakening may be on the horizon," Lynn Franco, the director of the Conference Board Consumer Research Center, said in a press release.
Joe Morrissey, a vice president of bank stock trading at Boenning & Scattergood Inc., said he was surprised at the market's reaction. "Consumer confidence couldn't have been worse, but" as a whole investors are "buying this market." He called that "a very bullish sign," though he said he is not convinced the worst is over.
The S&P/Case-Shiller Home Price Index showed the 10-year composite index declined 2.3% in January and fell 11.4% in the last year, Standard & Poor's said Tuesday. The 20-City Composite Index declined 2.4% in January and is down 10.7% this year.
Of the 20 metropolitan areas in the indexes, only Charlotte increased, 1.8% for the year. But Charlotte was down 0.2% in January compared with December. All 20 markets showed declines for the past five months.
"Home prices continue to fall, decelerate and reach record lows across the nation," David M. Blitzer, the chairman of S&P's index committee, said in a press release. "No markets seem to be completely immune from the housing crisis."
Matt Shields, a trader at FIG Partners LLC in Atlanta, said the numbers "spooked the market a little bit" but it seemed to rebound.
Large-cap bank stocks were mixed. Wells Fargo & Co. fell 0.1%, Wachovia Corp. 0.7%, JPMorgan Chase & Co., 1.1%, and Bank of America Corp. 3.5%. Washington Mutual Inc. rose 5% and Citigroup Inc. rose 0.6%.
Regionals also fell. Regions Financial Corp. dropped 0.2%, National City Corp. 3.2%., KeyCorp 0.2%, Fifth Third Bancorp 1.8%, and PNC Financial Services Group Inc. 1.4%.
One of the financial sector's biggest gainers was Thornburg Mortgage Inc.; its shares rose 36.4%, to $1.73, after the real estate investment trust set terms on the proposed private placement offering of up to $1.35 billion in senior subordinated notes due in 2015. The Santa Fe, N.M., company's shares are down 84.6% for the month.
