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By Jennifer Yousfi
U.S. stocks stumbled on news of a lower-than-expected consumer confidence reading and more warnings of weak earnings for financial firms.
At noon ET, the blue-chip Dow Jones Industrial Average Index had posted a decline of 68.55 points (-0.55%), to trade at 12,480.09. The tech-laden Nasdaq Composite Index dropped 3.28 points (-0.14%), to reach 2,323.47. And the broader Standard & Poor's 500 Index slumped 3.13 points (-0.23%), to hit 1,346.75.
Most sectors were up with the basic materials sector (2.24%), and the energy sector (1.71%), posting the largest gains. The conglomerates sector (-0.40%) and the services sector (-0.09%) had the only declines.
The Conference Board announced its consumer confidence reading for the month today, dragging stocks lower. March's index reading dropped to 64.5 from February's revised reading of 76.4. Consumer confidence is at its lowest point since the Iraq War began in 2003.
"Looking ahead, consumers' outlook for business conditions, the job market and their income prospects is quite pessimistic and suggests further weakening may be on the horizon," said Lynn Franco, director of consumer research at the Conference Board, MarketWatch reported.
In the financial sector, Merrill Lynch & Co. (MER) advised clients to sell shares of Bank of America Corp. (BAC). Meanwhile, JPMorgan Chase & Co. (JPM) cut its earnings outlook for Merrill, the third-largest U.S. securities firm.
"One of the questions with financials is 'How big are writedowns going to be?'" Kurt Brunner, a Philadelphia- based portfolio manager at Swarthmore Group Inc., which oversees about $1.6 billion, told Bloomberg News. "The consumer discretionary names will still struggle for a while. Consumer spending is going to be tight."
In overseas markets, Japan's Nikkei Index jumped 265.13 points to close at 12,745.22. Hong Kong's blue-chip Hang Seng Index rebounded from declines before the holiday weekend with an increase of 1,356.30 points to close at 22,464.52.
At midday, the dollar had lost ground against the euro [down 1.162%], the yen [down 0.756%] and the pound sterling [down 0.701%].
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March consumer confidence down, outlook grim
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