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Benchmarks ended lower on Tuesday on reports of a decline in consumer confidence in February and dismal US home prices data. However, the retail sector gained on the back of Home Depot and Macy’s better-than-expected earnings reports. Overall, it was a choppy session with benchmarks entering the positive zone at noon but failing to hold on to gains.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
 
The Dow Jones Industrial Average (DJI) lost 0.2% to close Tuesday’s trading session at 16179.66. The Standard & Poor 500 (S&P 500) declined 0.1% to finish at 1845.12. The tech-laden Nasdaq Composite Index too fell 0.1% to 4287.59. The fear-gauge CBOE Volatility Index (VIX) dropped 3.9% to settle at 13.67. Total volume on the New York Stock Exchange was 3.5 billion shares.  Advancing stocks were outnumbered by the declining stocks on the NYSE. For 45% stocks that gained, 52% declined.
 
US stocks were negatively impacted due to a drop in the Consumer Confidence Index. The Conference Board reported the index had  dropped from 79.4 in January to 78.1 in February. The drop was larger-than-expected as the consensus estimate predicted it would improve, coming in at 80.4. The Expectations Index fell from 80.8 to 75.7. Consumers’ expectations on business conditions, labor market and earnings for the next six months plunged from 17%, 15.1% and 16.6% to 16.3%, 13.3% and 15.4%, respectively.
 
Also, US home prices growth slowed down at the end of last year according to S&P/Case-Shiller’s Composite Index. In December the 10-City Composite remained relatively unaffected while the 20-Composite declined 0.1% for the second successive month. Eleven out of twenty recorded a drop in home prices in December, even though the national home prices were up 11.3% in year 2013.
 
News on the earnings front was reassuring for the investors. The largest US home improvement chain Home Depot Inc. (NYSE:HD) led the gains among the Dow components. Its shares rallied almost 4% after it reported an improvement in earnings per share in the fourth quarter which rose to 73 cents from to 68 cents. This was largely due to a reduction in outstanding common shares. The figure was also  higher than the Zacks Consensus Estimate of 70 cents. The company also raised its quarterly dividend by 21% to 47 cents per share.
 
Department store chain Macy’s Inc. (NYSE:M) also reported better-than-expected fourth quarter profit as it rose to $811 million or $2.16 per share from $730 million or $1.83 per share. However, it failed to outpace the Zacks Consensus Estimate of $2.17 per share. Its shares jumped 6% to close the day at $56.25 per share.
 
The Consumer Discret Select Sector SPDR (XLY) gained 0.7%. Key stocks from the Consumer Discretionary sector such as Amazon.com Inc. (NASDAQ:AMZN), McDonald's Corp. (NYSE:MCD), Twenty-First Century Fox, Inc. (NASDAQ:FOXA), priceline.com Incorporated (NASDAQ:PCLN) and Nike, Inc. (NYSE:NKE) surged 1.9%, 0.1%, 0.1%, 3% and 0.4%, respectively.
 
Six out of the ten S&P 500 sectors ended in red. Major sectors such as Financials, HealthCare and Technology slipped during the final hour of trading and dragged the index lower.
 
The Financial Select Sector SPDR (XLF) led the decline as it fell 0.6%. Stocks of financial behemoths such as JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), Citigroup Inc. (NYSE:C), The Goldman Sachs Group, Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS) plummeted 1.7%, 1.2%, 1.2%, 1.8% and 1.9%, respectively.

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