NEW YORK - The market drifted between gains and losses throughout the day Tuesday, then headed steadily lower in the last hour of trading.
Investors found some solace in strong quarterly reports from Home Depot and Macy’s. The enthusiasm was not enough, however, to offset an unexpectedly steep decline in consumer confidence this month, attributed mostly to bitter cold weather and winter storms that affected much of the country.
“The weather is having an impact on everything, from homes, vehicles to retail sales, but fortunately we expect that pent-up demand to return later this year,” said Joseph Tanious, a global market strategist at J.P. Morgan Funds.
The Dow Jones industrial average fell 27.48 points, or 0.17 percent, to 16,179.66. The Standard & Poor’s 500 index fell 2.49 points, or 0.13 percent, to 1,845.12, and the Nasdaq composite fell 5.38 points, or 0.13 percent, to 4,287.59.
Macy’s reported an 11 percent rise in fourth-quarter income that easily beat analysts’ expectations, but sales came up short because of the weather. The company said that at one time in January, 30 percent of its stores were closed because of inclement weather.
Home Depot had a similar story: The nation’s largest home-improvement retailer said profits fell 1 percent from a year ago, hampered by bad winter conditions.
“We don’t like to use weather as an excuse but we think we probably lost $100 million in the month of January,” said Home Depot’s chief financial officer, Carol Tome, in a conference call with investors. “Atlanta was frozen, for example. It was tough here.”
Investors were able to forgive Macy’s and Home Depot for missing analysts’ sales expectations. Macy’s rose $3.19, or 6 percent, to $56.25 and Home Depot closed up $3.11, or 4 percent, to $80.98.
Investors were less forgiving about a weak consumer confidence report.
The Conference Board’s index of consumer confidence fell to 78.1 in February from a revised 79.4 in January. That was below the 80.1 level economists polled by FactSet were expecting. The report is a closely watched indicator of how likely consumers are to spend money and keep the economy moving forward.
The confidence slump was the latest sign in the past several weeks that the recent bout of cold weather has slowed the economy. The regions that had the biggest declines in confidence were in the middle of the storm earlier this month that dropped snow from Atlanta to Boston.
“Perhaps [confidence] would have done slightly better had the weather been less dismal,” economists at the investment bank RBS wrote in a note to investors.
Investors should expect more muddled days like this for the next few weeks, strategists say.
Fourth-quarter earnings reports are mostly over. With Home Depot’s results now out, all 30 members of the Dow have released earnings for this quarter. By the end of the week, 486 out of the 500 members of the S&P 500 will have reported their results.
In other markets, the yield on the U.S. 10-year Treasury note was effectively unchanged from the day before at 2.70 percent. The price of crude oil fell 99 cents, or 1 percent, to $101.83 and gold rose $4.70, or 0.4 percent, to $1,342.70.
Business, Pages 26 on 02/26/2014