U.S. stocks were struggling to maintain early gains at midday Tuesday, after the Conference Board reported that its consumerconfidence index dropped in January to the lowest level since December 1996.
The drop, which shows Americans are less optimistic about the economy goingforward, gives Federal Reserve policymakers added reason to consider cuttinginterest rates further — a move that could spur companies to resume spendingon technology.
The Fed’s Open Market Committee on Tuesday began a two-day meeting on ratepolicy. Analysts are expecting a 50 basis-point rate cut when the meetingconcludes in mid-afternoon Wednesday.
Since consumer spending is a key driver of the economy, however, a bigslowdown in confidence could make a recovery harder for the Fed to engineer.The Conference Board’s January drop was the largest since October 1990, andthe index of consumers’ future expectations was the lowest since October1993, reports said.
Cisco Higher, Nokia Lower
Technology stocks were mixed at midday. The Nasdaq Composite Index, whichincludes a number of tech issues, was down 0.86 at 2837.48.
Cisco Systems (Nasdaq: CSCO) was the most active stock on the Nasdaq index,trading at US$37.94, up 69 cents at midday. On Monday, Cisco shares fell as the company’schief executive warned of slowing growth.
Mobile phone maker Nokia (NYSE: NOK) helped pull technology stockslower. Nokia, which was down $3.02 at $33.97 in early afternoon, reportedstrong results for the fourth quarter ended December 31st, but warned of aslowdown in the current quarter.
Salomon Smith Barney reportedly downgraded Nokia to neutral from outperformfollowing the news, while Merrill Lynch was said to have maintained a buyrating.
E-commerce stocks were mixed, with e-tail giant Amazon.com, Inc. (Nasdaq:AMZN) down $1.25 at $18.88 ahead of its quarterly earnings report, due outafter the close of trading Tuesday.
Analysts reportedly are expecting the company tolower its forecasts for future earnings, and to announce some cost-cuttingmeasures when it reports results for the fourth quarter ended December 31st.
Amazon competitor Barnesandnoble.com (Nasdaq: BNBN) was down 9 cents at$2.22, while Egghead Software (Nasdaq: EGGS) continued a recent slump,falling 3 cents to $1.06 by midday. Egghead on Friday said sales for thequarter just ended would be lower than previously thought.
Online Travel Shares Rise
Overall, the E-Commerce TimesIndex, which tracks trading in 10 big-name dot-coms, was up 0.43 percent.
Among other e-commerce issues, Expedia, Inc. (Nasdaq: EXPE) was up $1.38 at$18.12 after the online travel company reported an 81 percent rise inrevenue for the latest quarter, along with a smaller-than-expected loss.
Thecompany, backed by Microsoft Corp., said it expects strong results in thefuture as enhancements to its site bring new customers online. Expediarival Travelocity (Nasdaq: TVLY) also traded higher, gaining $1.12 to$22.62.