(RTTNews) - Following the release of some mixed economic data, stocks are seeing modest gains in mid-afternoon trading on Tuesday. A sharp decline in the price of oil is also helping to keep the stock markets in positive territory.

The Department of Commerce revealed that new home sales climbed in April to a seasonally-adjusted annual rate of 526,000 units. This was 3.3 percent above the revised rate 509,000 units seen in March.

New home sales are still well below the pace seen at the same period last year. Tuesday’s data represented a 42 percent decline compared to April of 2007, when the annual rate was 907,000 units.

Meanwhile, consumer confidence plunged to a 16-year low in May, a report from The Conference Board revealed earlier in the day. In a survey that revealed a marked deterioration in people’s attitudes toward the economy, consumer confidence dropped to 57.2 for May, down from a reading of 62.8 posted for April. The index now stands at its lowest level since October of 1992.

The conference board attributed the further decline in confidence to weakening business and job conditions, coupled with growing pessimism about the short-term future. Specifically, consumers are concerned about inflation as gas prices rise to record highs and food prices continue to soar.

While consumers continue to worry about increased inflation, investors breathed a sigh of relief as the price of oil moved further away from its record prices set last week. The price of crude is currently down $3.63 at $125.55 a barrel. The record oil prices had increased concerns that higher fuel costs would force consumers to pare their spending on discretionary items.

In recent trading, the major averages have moved back to the upside. The Dow is currently up 29.72 at 12,509.35, the Nasdaq is up 20.74 at 2,465.41 and the S&P 500 is up 1,379.76.

Dow Components

A majority of the Dow components are trading on the positive side, sending the blue chip index modestly higher. Of the 30 stocks that make up the Dow, only 9 are seeing declines.

Citigroup (C) is one of the biggest gainers on the Dow. Shares of the diversified financial company are currently trading up 2.7 percent. With the gain, the stock is reversing most of the decline posted in the previous session.

Taking its cue from the airline sector, Boeing (BA) is also seeing significant buying interest. Adding to gains posted in the previous two sessions, shares of the airline manufacturer are up 1.6 percent. Despite the gain, the stock recovered only a portion of the substantial loss posted on Wednesday.

Computer maker, Hewlett Packard (HPQ) is sharply higher as well. The stock is up 2 percent, adding to a gain posted in the previous session. IBM (IBM) is also showing strength, climbing 1.7 percent.

On the other hand, General Motors (GM) is keeping buying interest in the Dow muted after the company announced that it will speed up production cuts at its pickup truck factory in Flint, Mich. Shares of the auto maker are falling 1.9 percent, and are on track to set a twenty-six year closing low.

DuPont (DD) is also sharply lower. Shares of the specialties chemical maker are down 1.2 percent, adding to its recent trend lower. The stock is set to close at its worst level since late March.

Pfizer (PFE) is seeing considerable selling pressure as well. Pfizer shares are trading 1.1 percent lower, adding to a sharp loss posted in the previous session. Pfizer is on track to set a multi-year closing low.

Sector News

Airline stocks are turning in some of the best performances, helped by the more than $3 a barrel drop in the price of oil. The Amex Airline Index is climbing 3.7 percent, moving off of a record closing low set in the previous session. Other transportation stocks are higher as well. The Dow Jones Transportation Average is up 1.9 percent.

Software stocks are seeing significant buying interest, boosted by a 3.8 percent gain in CA Inc. (CA). The Amex Software Index is moving 1.5 percent higher, reversing a substantial decline posted on Friday.

Led by a 55 percent climb in Standard Pacific (SPF), housing stocks are also showing considerable strength. The interest comes after the company reached a deal to receive more than $530 million from the affiliates of MatlinPatterson. The Philadelphia Housing Index is up 1.3 percent, moving away from a two month closing low set in the previous session.

Other stocks that are seeing notable gains include networking, brokerage and semiconductor stocks. The Amex Networking Index is climbing 1.6 percent, the Amex Securities Broker/Dealer Index is up 1.6 percent and the Philadelphia Semiconductor Index is moving 1.3 percent higher.

On the other hand, gold stocks are seeing significant selling pressure, hurt by the nearly $20 an ounce decline in the price of the precious metal. The Amex Gold Bugs Index is falling 3.9 percent, extending a recent downtrend.

Oil stocks are also posting substantial losses, as the price of oil continues to recede. The Amex Oil Index is down 1.8 percent. Steel and Natural Gas Stocks are lower as well. The Amex Steel Index is down 1.7 percent, while the Amex Natural Gas Index is falling 0.7 percent.

Other Markets

In overseas trading, most Asian markets rebounded on Tuesday from yesterday’s sharp declines. Japan’s Nikkei 225 ended the day up 1.5 percent. Stocks benefited from a modest pullback in the value of the yen. The major European markets ended the day mixed after seeing after seeing earlier weakness, with the U.K. FTSE 100 Index declining by 0.5 percent.

Meanwhile, treasuries continue to see weakness, with the benchmark ten-year note lingering just above its worst levels of the day. Subsequently, the yield on the ten-year note is currently up 8 basis points at 3.911 percent.

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Posted in Categories: Economy, Eurozone, Japan, Releases, UK, USA.

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