U.S. stock markets posted mixed results Tuesday, but held onto much of the gains from the previous day.
The Dow Jones Industrial Average closed down nearly 32 points, less than half a percent, while the broader Standard and Poor's 500 Index was up nearly half a percent to close at 903. The technology-heavy Nasdaq Composite Index also posted a modest gain, closing nearly nine points higher at 1,344.
Analysts say the market got some boost from President Bush's signing of a new law to stiffen penalties for corporate corruption. But advances were checked by a worse-than-expected consumer confidence report that showed American consumers worry about their jobs and the future of their investments.
The independent research group, the Conference Board, said its monthly consumer confidence index dropped nine points in July, the biggest monthly decline since last October. For some economists, the dwindling consumer confidence spells trouble ahead.
Stephen Roach, chief economist for investment firm Morgan Stanley, expects consumers to spend less, which, he says, may lead to a recession before the end of the year. He outlined his pessimistic outlook and said, "Consumers [are] addicted to spending, overextended, no savings. They have lost a lot of equity wealth. They are probably going to lose some housing wealth. And I think the job situation is very tenuous in America. There will be some lay-offs between now and year-end that will probably push the conusmer over the edge."
In the corporate world, IBM announced it will buy the consulting business of PriceWaterhouseCooper for $3.5 billion. Analysts expect this to reflect on Wall Street in Wednesday's trading.