Traders Frown After Confidence Letdown

So much for Monday's gains.

Stocks took a dive Tuesday on concern over the health of the consumer. The Dow Jones Industrial Average gave up 82 points, negating most of yesterday's rally, to finish the day at 8447. The Nasdaq slipped 9 to 1835, and the S&P 500 dropped 8 to 919.

Consumer staples and cyclicals stumbled after the Conference Board said consumer confidence fell unexpectedly this month. The index had risen each month since February, but today's data suggest the shopper's enthusiasm appears to be leveling off. Shares of Wal-Mart (WMT), Abercrombie and Fitch (ANF) and Limited Brands (LTD) gave some ground. Last week, the Commerce Department said the personal savings rate (the difference between the growth of personal income and that of personal spending) rose in May, alluding to a more frugal national attitude.

Energy stocks also declined, as prices fell sharply. Chevron (CVX) and ExxonMobil (XOM) each took a hit, as crude futures gave back gains. By 4:17 p.m., oil traded down $1.50 on the day at $69.99 a barrel.

In housing, home prices continued to fall in April, according to the latest reading of the Case-Shiller index, however the rate of decline slowed to 18.1%, which was better than economists had expected.

In Asia, stocks finished mixed. Japan's Nikkei picked up 1.8%, after a new report revealed household spending rose in May for the first time in 15 months. In Hong Kong, the Hang Seng slipped 0.8%. In Europe, the FTSE dropped 1.0%. Traders may have been responding to a revised reading of the U.K.'s gross domestic product, which showed the British economy shrank 2.4% in the first quarter, compared to the previous estimate of 1.9%. The quarterly decline is the country's worst since 1958.

The dollar fell against the yen, as Asian markets advanced. Hopes that the recession is tapering off have quieted some calls for a safety currency.