NEW YORK, Feb. 26 (UPI) -- Stock prices on most major indexes ended down Tuesday, pressured by a weak reading on consumer confidence, which brought to an end a two day rally.
The blue-chip Dow Jones industrial average, which surged 177.56 points Monday, dropped 30.45 points, or 0.30 percent, to close at 10,115.26. The tech-heavy Nasdaq composite index, which jumped 45.34 points in the previous session, was down 2.92 points, or 0.16 percent, to close at 1,766.96.
The broader New York Stock Exchange composite index was flat, gaining 0.98 points to close at 577.34 while the Standard & Poor's 500 index was flat, dropping 0.03 points to close at 1,109.40.
The American Stock Exchange composite index dropped 2.24 points to close at 864.41.
The broad Wilshire 5000 gained 12.00 points, or 0.12 percent, to close at 10,358.69.
Volume was 1.29 billion on the Big Board and 1.65 billion on the Nasdaq Stock Market.
Market breadth was positive with advancers beating decliners by 17 to 13 on the NYSE and by 18 to 16 on the Nasdaq.
Analysts said stocks, which opened higher, retreated after the Conference Board said consumer confidence in the economy declined during February from its highest level in five months, but still pointed to healthy consumer spending in the months ahead.
The Board said its index measuring consumer confidence fell 3.2 percentage points to 94.1 during the month from 97.3 in January. Economists on Wall Street were expecting confidence to ease to 97.0 during the month.
Consumer confidence hit an all-time high of 144.7 in May of last year and sank to an eight year low of 84.9 in November after the Sept. 11 terrorist attacks.
Economists watch the index because high confidence readings suggest consumers are in a mood to spend, and such spending accounts for about two-thirds of economic output.
The Board said the survey, which is based on a representative sample of 5,000 U.S. households, showed its present situation index fell to 94.8 from 98.1 while its expectations index declined to 93.6 from 97.6 a month earlier.
"While confidence has weakened from January's level, both components of the index still point to healthy consumer spending in the months ahead," said Lynn Franco, Director of The Conference Board's Consumer Research Center.
"The consumer will continue to provide solid spending support as the economy moves into recovery," Franco added.
Elsewhere on the economic front, Redbook Research's latest indicator of national retail sales showed sales up 0.6 percent in the first three weeks of February compared with the same period in January.
The report also showed seasonally adjusted sales in the three-week period rose 3.9 percent from the same period a year earlier.
Redbook said on an unadjusted basis, sales in the week ended Feb. 23 were up 3.5 percent from the same week in 2001.
The report showed that sales were above plan for most retailers, and that President's Day sales helped them to continue cutting autumn and winter inventories.
Meanwhile, the Bank of Tokyo-Mitsubishi-UBS Warburg Retail Chain Store Sales Index fell 0.4 percent in the week ended Feb. 23 from the week before, on a seasonally adjusted, comparable-store basis.
Though week-to-week sales were soft, the report said most retailers were above expectations.
Additionally, year-over-year sales momentum stayed nearly steady at a 5.1 percent pace last week compared with a 5.2 percent pace the prior week.
"President's Day related promotions were generally reported to have been comparable to last year, and inventory levels are reportedly in excellent shape among both discounters and department stores," the report said.
Wal-Mart and Target were said to have exceeded their expectations for the week, while Federated, May and Mervyn's stores met their expectations.
Analysts at BTM/UBS Warburg estimate that same-store sales in February, as measured by their monthly index, will be up about 5.5 percent versus a 2.5 percent increase in February 2001.
Meanwhile, in Washington, a Senate Commerce panel resumed its Enron hearings, with former Enron CEO Jeff Skilling testifying alongside Sherron Watkins, the company vice president who has said top executives knew of the financial problems that caused the collapse of the energy trader.
Skilling, who left Enron in August, has said he knew little about the company's shaky finances. But investors have shown little tolerance for companies with questionable numbers.
Experts said the pullback in stocks also came as investors skeptical about the staying power of a two-session rally awaited more signs from companies that the worst of the economic slowdown has really passed.
Looking ahead, markets are also awaiting Federal Reserve Chairman Alan Greenspan's testimony on monetary policy Wednesday. When last he spoke, the Fed chief expressed cautious optimism that the economy is on the mend.
Meanwhile, U.S. Treasury prices eased. The 10-year bond slipped 18/32, its yield, which moves in the opposite direction of its price, rose to 4.93 percent from 4.85 percent late Monday.
In Europe, stock prices ended slightly higher in fairly active trading in London, Frankfurt and Paris, supported by a surprisingly strong uptick in the February measure of West German business confidence, the Ifo.
The London International Stock Exchange's blue-chip FTSE-100 index gained 32.3 points, or 0.63 percent, to 5,133.0. The German DAX index rose 19.08 points, or 0.39 percent, to 4,882.62 and the French CAC-40 index rose 35.42 points, or 0.82 percent, to 4,340.86.
Analysts said stocks rose after the Ifo institute's monthly confidence index, based on a survey of 7,000 companies, rose for a fourth month to 88.7 from a revised 86.2 in January. Analysts had predicted a rise to 87.
A separate Ifo index measuring expectations for business conditions in the future rose to 101 in February, compared with 94.8 last month. That was the biggest gain since 1983, when the West German economy emerged from a contraction the year before which cost then-Chancellor Helmut Schmidt his job.
Analysts said the readings underlined expectations Germany will pull out of recession this year.
Earlier in Asia, prices on the Tokyo Stock Exchange ended lower in cautious trading ahead fading hopes for the Japanese government's anti-deflation package due out Wednesday.
Japan's blue-chip Nikkei Stock Average of 225 selective issues, which eased 60.31 points Monday, lost another 93.84 points, or 0.90 percent, to 10,202.63, well below its best level of the session of 10,458.87.
The market opened higher following the solid gains on Wall Street Monday, but the early rally soon ran out of steam as players cashed in near-term profits ahead of the policy steps and the Bank of Japan's board meeting Thursday, traders said.
Local media reported that the government is likely to devise the much-awaited anti-deflation package with a two-phase structure, with the more substantial measures being implemented after March.
The first phase is expected to contain measures designed to stabilize stock prices and call for additional monetary easing.
The second phase will focus on tax reform and possible public fund injections into banks after the government monitors developments in the stock market and the financial system.
Elsewhere in Asia, prices ended higher on the Hong Kong Stock Exchange as buying of large blue chip stocks offset declines in property issues.
The blue-chip Hang Seng Index rose 51.11 points, or 0.49 percent, to 10,547.13 after a gradual decline from an early intraday high of 10,667.57.
Property issues lost ground on a report that a special advisory committee set up by the government will on Friday unveil recommendations for radical tax changes, including an increase of property rates.
Meanwhile, prices on the South Korean Stock Exchange ended higher to close above the 800-point level for the first time in 19 months as investors bought largely on optimism carried over from Monday's rally on Wall Street.
The Korea Composite Stock Price Index, or Kospi, rose 9.66 points, or 1.20 percent, to 801.14 -- its highest close since July, 18, 2000, when it closed 812.33.
Institutional investors, mostly investment trust companies and other fund managers, have been active buyers in recent sessions since they are looking to increase their equity holdings. Market participants expect institutions to continue to buy in the near term since the equity portion of their portfolios has been at a historic low.
Prices on the Taiwan Stock Exchange ended slightly lower as investors took advantage of Wall Street-inspired gains to head for the sidelines.
The Weighted Price Index of the Taiwan Stock Exchange lost 10.92 points, or 0.19 percent, to 5499.79.
The market had opened sharply higher on the back of a 1.8 percent rise in the Dow Jones Industrial Average and a 1.6 percent gain in the tech-heavy Nasdaq Composite Index. However, the market started to drift lower a little over half way through the session.
Participants are finding few buying incentives and are wary of the onset of the second quarter, traditionally a slack season for the global personal computer industry, dealers said.
Most of the selling was by institutional investors.
Elsewhere around the Pacific region, prices ended slightly higher on the Australian Stock Exchange. The blue-chip All Ordinaries Index added 12.20 points, or 0.36 percent, to 3,380.10.
