Stocks Socked by Weak Consumer Confidence

Stocks reversed early gains Tuesday as diminished consumer confidence bumped positive housing price news.

The Dow Jones Industrial Average closed down 46 points to 9742. The Nasdaq ebbed 7 to 2124 and the S&P 500 was down 2 at 1060. 

The Conference Board reported that its U.S. consumer confidence index fell in September due to rising concerns about the economy, job prospects and income. The index dropped to 53.1 in September from 54.5 in August.

"Consumers remain quite apprehensive about the short-term outlook and their incomes," said Lynn Franco, head of the consumer research group at the private research organization.

The S&P Case-Shiller housing price index showed further improvement when the latest figures were released Tuesday morning. Only two of the 20 metro markets it measured showed price declines, and 13 of them registered price increases for the third consecutive month. STORY

Mergers and acquisitions this month have helped underpin the market's rally as investors interpreted the deal making as a sign of confidence among executives. Almost $30.7 billion of deals were announced on Sunday and Monday, and the moves followed other big recent moves by Walt Disney (DIS), Kraft Foods (KFT) and Dell (DELL).

The Federal Deposit Insurance Corp., facing a deposit insurance fund deficit by Wednesday, will have U.S. banks prepay their premiums for three years. The move will raise about $45 million. Premium rates will increase by  0.03% in 2011. STORY

Overseas, Asian stocks followed Wall Street's Monday rise, with the Nikkei 225 climbing 0.9% in Tokyo. In Europe, stock indexes were slightly lower.

As of 4:08 p.m., crude oil futures traded on the Nymex were down 7 cents to $66.64 a barrel.