Markets Take A Breather After Big Gains

U.S. stocks declined today, with the S&P 500 backing off from a record close, as investors weighed a decline in consumer confidence and better-than-expected earnings from home-improvement retailer Home Depot.

The S&P/Case-Shiller Home Price Index showed that home prices rose 11.3% last year, but it also indicated a cool-down in the fourth quarter. The housing market has been a big driver of the economic recovery, but with mortgage rates creeping up more recently, it’s led to a softening of home loan demand.

Still, Home Depot (HD, Fortune 500) shares gained 4% Tuesday after the retailer said that a recovering housing market drove an increase in quarterly sales.

Today prominent bitcoin exchange Mt.Gox said it had decided to “close all transactions for the time being,” with the move coming after the website halted transactions earlier this month after Mt.Gox detected what it called “unusual activity.”  This has sent a panic wave around the internet as to the feasibility of this new currency.

Wednesday:

10:00 a.m.: New home sales

11:30 p.m.: $12 billion 2-year floating-rate note auction

12:00 p.m.: Boston Fed President Eric Rosengren

1:00 p.m.: $35 billion 5-year note

7:30 p.m.: Cleveland Fed President Sandra Pianalto

Market Update:

The market was looking a little vulnerable this morning before market open.  Futures were down quite a bit before the Home Depot earnings increased positive sentiment.

However, after such a broad based rally yesterday, it was no surprise that the market took a pause here.  Especially with mixed data from the housing report.