Dow Lower on Housing, Credit Card Bill

A second day of key housing data turned stocks mixed Tuesday.

Stocks were up-and-down as traders frowned on the latest government data on the housing sector, particularly after expecting rosy results. The Dow Jones Industrial Average lost 29 points at 8474. The Nasdaq rose 2 to 1734, and the S&P 500 dropped 1 to 908. 

Traders were initially caught off guard by a Commerce Department report showing the annual rates of housing starts and building permits each fell in April. Economists had predicted a bounce for both rates, which would have supported the idea that the market had bottomed out. Instead, housing starts slipped to an annual rate of 458,000, the lowest rate on record since data tracking began. There was a silver lining if investors looked hard enough: The numbers were dragged down by a decrease in apartment-type projects, while single family housing actually increased. 

That data follows a key survey released Monday. The National Association of Home Builders/Wells Fargo Housing Market Index rose to 16 in May, up from 14 in April and in line with economists' estimates.

Corporate earnings supported the idea of a turnaround in housing, if not home improvement. Home Depot (HD) reported a 44% jump in first-quarter earnings, largely on a decline in one-time charges, but the firm still topped analysts' estimates, which typically exclude such items. However, Home Depot warned a continuing rise in foreclosures could impact it the rest of the year, a key reason why shares fell. The results came a day after rival Lowe's (LOW) beat the Street. 

In finance, several of the country's largest financial institutions are preparing to return money borrowed from the government through the Troubled Asset Relief Program, Reuters reported, citing anonymous sources. The banks include Goldman Sachs (GS), Morgan Stanley (MS) and several others. However, no decision by the government on those repayments will come until June. The Senate passed a sweeping overhaul of the credit card business by approvinglegislation that will prohibit companies from arbitrarily raising a person's interest rate and fees. Wire service reports estimated the new law would hurt profits at companies like Capital One (COF) and Citigroup (C). The House is expected to vote on the measure before the Memorial Day holiday. 

World markets were mostly higher. In Asia, Japan's Nikkei picked up 2.8%, while Hong Kong's Hang Seng climbed 3.1%. In Europe, the U.K.'s FTSE stood up 0.8% in afternoon trading.

On the Nymex, energy prices continued to rise, suggesting renewed faith in the economy. Crude traded up 62 cents at $59.65 a barrel.