Financial News

U.S. stocks ended an otherwise stellar second quarter on a down note Tuesday, as major indexes extended losses suffered in overseas markets as a surprise drop in U.S. consumer confidence stoked concerns about the prospects for an economic recovery.

On Tuesday, the 30-stock Dow Jones industrial average finished lower by 82.38 points, or 0.97%, at 8,447.00. The broad Standard & Poor's 500-stock index fell 7.91 points, or 0.85%, to 919.32. The tech-heavy Nasdaq composite (NASDAQ: news) index shed 9.02 points, or 0.49%, to 1,835.04.

On the New York Stock Exchange, 17 stocks were lower in price for every 13 that advanced. Nasdaq (NASDAQ: news) breadth was 15-12 negative.

In the second quarter, the Dow was up 11%, the S&P 500 gained 15%, and the Nasdaq vaulted higher by 20%.

For the first six months of the year, the Dow was down 3.8%, the S&P 500 was up 1.8%, and the Nasdaq gained 16%.

Treasuries fell in price Tuesday. The dollar index rose. Gold and oil futures fell.

Looking ahead, Wednesday brings the Institute for Supply Management's manufacturing index for June and the May construction spending report.

The market's primary focus this week will be on Thursday's release of two key labor market indicators: the June employment report, and weekly initial jobless claims.

S&P MarketScope expects slow trading for the remainer of the holiday shortened week; U.S. financial markets are closed Friday in observance of the Independence Day holiday.

A report released by the Conference Board Tuesday showed U.S. consumer confidence slipping to 49.3 in June after surging 14 points to 54.8 in May [revised fractionally from 54.9]. This breaks a string of 3 consecutive monthly gains, and and puts the index back below 50.0, and slightly lower than its 51.0 mark from a year ago. The present situation index fell to 24.8 from 29.7 [revised from 28.9]. It was at 65.4 a year ago. The expectations index fell to 65.5 from a revised 71.5 [was 72.3] in May [and it was 41.4 a year ago]. The 1-year inflation median edged up to 5.9% vs. 5.6% in May [7.7% a year ago].

The Chicago purchasing managers' index [PMI] climbed to 39.9 in June from 34.9 in May. The employment index rose to 28.9 from 25.0, while new orders improved to 41.6 from 37.3. Prices paid rose to 36.3 versus 34.9.

"The data are better than expected and add support to forecasts that the recession is bottoming," says Action Economics.

U.S. S&P/Case-Shiller home price index fell 0.56% to 139.2 in April from 140.0 in March for the 20-city composite. On a year-over-year basis, the index improved modestly to a 18.1% decline vs. -18.7% in March. Of the 20 cities measured, 12 posted declines in home prices, paced by a 3.5% drop in Las Vegas. The 10-city composite index fell 0.67% on the month to 150.3, from 151.4. It is down 18.0% year-over-year, and compares to -18.7% in March.

The International Council of Shopping Centers [ICSC] and Goldman Sachs (NYSE: GS - news) weekly chain store sales index rose 1.6%, the best gain sinde Jan. 31, in the week ended June 27 after being unchanged the week before. On a year-over-year basis, sales also improved by 0.6% after being down 0.9% the week before.

The Bank for International Settlements urged governments to move away from "staggering" stimulus packages as the global economy stabilizes and focus instead on reforming the international financial system. The AP reported BIS said authorities now need to think about the medium-term health of their economies and that means adopting policies that spur critical adjustments, not hinder them. It said government intervention has helped prevent a worse recession. But now that the "sense of free fall has dissipated" and a return to growth may be reached later this year, governments need to come up with plans to put their economies on a more sustainable footing, based less on debt in the rich world and exports in developing nations.

Among companies in the news Tuesday, H&R Block (HRB) reported fourth-quarter earnings per share [EPS] from continuing operations of $2.09, vs. $2.09 one year earlier, on 3% lower revenue. Wall Street was looking for EPS of $2.05. Block (NYSE: HRB - news) expects fiscal 2010 EPS from continuing operations to be in the range of $1.60-$1.80. The company said it plans to maintain its fiscal 2009 dividend rate in fiscal 2010.

Apollo Group (NASDAQ: APOL - news) (APOL) reported third-quarter EPS of $1.26, vs. $0.85 one year earlier, on a 26% revenue rise. The company noted a 22% year-over-year increase in University of Phoenix total degreed enrollment. Wall Street was looking for EPS of $1.12.

Associated Banc (NASDAQ: ASBC - news) -Corp (ASBC) said that it expects to record a provision for loan losses between $145 million-$160 million for the second quarter, which may result in a loss for the period. Second-quarter 2009 net charge-offs are expected to be between $60 million-$70 million. After taking into consideration this increased provision, capital levels will exceed all well capitalized standards at June 30, 2009.

Barclays (LSE: BARC.L - news) upgraded its rating on FedEx Corp (NYSE: FDX - news) . (FDX) to overweight from equal-weight.

General Mills (NYSE: GIS - news) (GIS) raised its $0.43 quarterly dividend to $0.47.