updated 11/4/2009 1:24:26 PM ET 2009-11-04T18:24:26

Stocks are zigzagging as investors weigh mixed reports on home prices and consumer confidence.

Major Market Indices

A decision Tuesday by IBM Corp. to double its stock-repurchase plan gave a boost to the Dow Jones industrials but the Nasdaq composite index fell. Falling stocks outpaced those that rose.

Stocks began the day higher following a report that home prices in 20 major metropolitan markets rose for the third straight month in August. The Standard & Poor's/Case-Shiller home price index gained 1 percent in August from July.

Home prices fell 11.4 percent from a year earlier, which was a smaller drop than economists polled by Thomson Reuters predicted. The year-over-year slide has slowed since February, indicating the housing market is stabilizing.

Investor sentiment took a hit after a report from a private research group caused worries that consumers might not be ready to spend this holiday season. Consumer strength is considered vital to a recovery in the economy.

The Conference Board's Consumer Confidence Index fell unexpectedly to 47.7 in October — its second-lowest reading since May. Analysts predicted a reading of 53.1.

Even if the index had met expectations, consumer confidence is still weak and remains one of the most worrisome problems facing the economy. A reading above 90 signals solid footing for the economy, and a measure above 100 signals strong growth.

The market's swings come as stocks have fallen in four of the past five days.

The Dow led major stock benchmarks after IBM, one of the 30 companies that make up the index, said it added $5 billion to its stock repurchase fund. The total now stands at $9.2 billion.

Economic data remain a focus for investors, especially consumer spending. Many of the companies that have reported third-quarter earnings are posting profits that are ahead of forecasts, but many consumers who are fearful of losing their job are holding back spending.

"When I look at the consumer, I think that is the next big test," said Dave Hinnenkamp, chief executive KDV Wealth Management in Minneapolis. "We've passed a big test on the earnings front."

In midday trading, the Dow Jones industrial average rose 64.39, or 0.7 percent, to 9,932.35. The broader Standard & Poor's 500 index rose 2.86, or 0.3 percent, to 1,069.81, while Nasdaq fell 8.24, or 0.4 percent, to 2,133.61.

Bond prices rose ahead of the government's latest auction, pushing yields lower. The Treasury is auctioning off $44 billion in two-year notes Tuesday afternoon. The yield on the benchmark 10-year Treasury note fell to 3.50 percent from 3.56 percent late Monday.

Traders are getting a fresh dose of earnings reports. United States Steel Corp. fell $2.64, or 6.5 percent, to $37.94 after reporting that it lost money for a third straight quarter as demand waned because of the struggling global economy.

Credit card processor Visa Inc. reports after the market closes. Its results should provide insight into whether consumers are back in stores and spending money. Visa rose 83 cents to $73.61.

Stocks have struggled in recent days as the dollar has been strengthening, which tends to push the prices of commodities lower. Commodities are traded in dollars, so a stronger dollar makes it more expensive for foreign investors to buy into the market.

The Dow fell 104 points Monday after a drop of about the same size Friday. It was the first consecutive triple-digit loss for the Dow since mid-June.

Fears of an overheated market have also been contributing to the slide in the week since major indexes hit their highest levels in more than a year. The market has been surging with little pause since March, and analysts have been saying for months that stocks are due for a consolidation.

Investors are also looking to the government's first reading on economic output for the July-September quarter. The report on gross domestic product due Thursday is expected to signal an end to the recession that began in December 2007. Economists predict the economy grew at an annual rate of 3.2 percent in the quarter, according to Thomson Reuters.

The dollar was mixed against other major currencies.

Crude oil rose 77 cents to $79.45 per barrel on the New York Mercantile Exchange.

IBM, the biggest driver of the Dow, rose $1.47, or 1.2 percent, to $121.58.

Four stocks fell for every three that rose on the New York Stock Exchange, where volume came to 553.8 million shares compared with 585.5 million shares traded at the same point Monday.

The Russell 2000 index of smaller companies rose 0.60, or 0.1 percent, to 594.28.

Overseas, Japan's Nikkei stock average fell 1.5 percent. In afternoon trading, Britain's FTSE 100 rose 0.5 percent, Germany's DAX index rose less than 0.1 percent, and France's CAC-40 added 0.2 percent.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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