At the Open: Stocks Tick Lower as Consumer Confidence Slips; Carnival Plunges 8% as Guidance Disappoints

Stocks have traded lower this morning as consumer confidence slipped and home prices rose at a slower pace.

AP

The S&P 500 has dropped 0.3% to 1,697.42, while the Dow Jones Industrials are off 0.2% at 15,370.56. The Nasdaq Composite has dropped 0.2% to 3,759.11.

Consumer confidence fell to 79.7 in September, the lowest since May, likely taking a beating from the continued budget and debt ceiling debate Washington. Home prices, meanwhile, rose in July, but at a slower pace. High Frequency Economics’ Jim O’Sullivan explains:

The recovery in home prices continues, although the pace may be  slowing a little. The seasonally adjusted S&P/Case-Shiller (CS) 20-city index rose 0.6% m/m in July, slightly below the 0.8% consensus, following 0.9% in June, 0.9% in May, and 1.7% in April.  We had forecast 0.7%. Before seasonal adjustment, the index rose 1.9% m/m in July…

Strengthening in home prices is a plus for growth through various channels, including increased consumer spending because of wealth and confidence effects, increased incentive to buy before prices go up some more, and increased incentive to lend because of less chance of mortgages turning delinquent.

As with yesterday, however, uncertainty regarding the Fed and when it will start to taper hangs over the market, as two Fed governors, Cleveland President Sandra Pianalto and Kansas President Esther George, are set to speak.

That should keep investors on their toes.

Carnival (CCL) has fallen 7.6% to $34.56 in early trading this morning after the company reported a profit of $1.38, above forecasts for $1.32, but issued disappointing guidance. It’s also dragging down shares of Royal Caribbean Cruises (RCL), which have fallen 3.1% to $38.18.

KB Home (KBH) has fallen 0.2% to $17 after it said it earned 28 cents a share, beating analyst forecasts for a profit of 21 cents a share.

Ocwen Financial (OCN) has gained has gained 1.6% to $57.70 after the company purchased its own shares from Wilbur Ross and amended its credit facility.

Molycorp (MCP) has gained 2.1% to $7.34 on reports that China would increase its purchases of rare-earth metals.