NEW YORK (Reuters) – Stocks fell on Tuesday as optimism over a possible deal by Greece in its debt wrangling dissipated after a batch of weaker-than-expected economic reports.
Hopes that Greece would reach a deal with private creditors on a debt swap and receive a bailout to sidestep a chaotic default boosted market sentiment initially.
But data showing home prices fell more than expected in December, business activity in the Midwest grew at a slower rate than anticipated and consumer confidence unexpectedly fell undermined the early positive tone.
“The consumer confidence decline sort of lends credence to this argument that the bears have been using that the only thing that has been creating better economic numbers has been inventory restocking and once the restocking is done the feeling is that it was a temporary blip,” said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
“So once you start to get some negative numbers, especially around the consumer, it lends to the argument that GDP growth is not really there and it is going to go back to zero.”
The Dow Jones industrial average (.DJI) was down 48.17 points, or 0.38 percent, at 12,605.55. The Standard Poor’s 500 Index (.SPX) was off 2.76
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