(eToro Blog) Equity markets in the U.S. that had moved higher yesterday despite worse than expected economic data have now flipped back into negative territory. While yesterday's lackluster housing price and manufacturing sector data may have taken some of the wind out of investors sails, today's data is rocking the boat that is Wall Street.Yesterday, it was reported that U.S. home prices fell 4.2% in the first quarter, hitting their lowest levels since mid-2002 after falling 3.6% in the fourth quarter, according to the S&P Case-Shiller home-price index.

This month's report is marked by the confirmation of a double-dip in home prices across much of the nation. The National Index fell 4.2% over the first quarter alone, and is down 5.1% compared to its year-ago level.The Conference Board, said its index of consumer confidence declined to 60.8 this month from a revised 66.0 in April, first reported as 65.4. The May reading was the lowest since November 2010 and was far worse than the 66.4 expected by economists. Consumer expectations for economic activity over the next six months plunged to 75.2 in May from a revised 83.2 in April, originally reported as 82.6. The present situation index, a gauge of consumers' assessment of current economic conditions, fell to 39.3 from a revised 40.2, originally reported as 39.6.

Analysts had been expecting today's release of ADP private sector labor data to have declined from the previous period, but the actual results of only 38,000 new jobs added were incredibly off the consensus figure of 175,000.

In the manufacturing sector, economists had forecast a decline in the ISM Manufacturing Index to 58.8 from April's 60.4, but the actual data, again, fell short at 53.5. While any number higher than 50 is considered a positive indication of business conditions within the sector, the pace at which it is approaching the 50 threshold is certainly worrying to investors.

Currently, the Dow has dropped to 12,415.85 points, losing nearly 1.25%; sentiment among eToro's traders is bullish in favor of buying by 6 buyers to 3 sellers. Meanwhile, the S&P 500 Index has slipped 1.14% lower to 1,330.33 points, and eToro trader sentiment is likewise bullish for buying, with 8 buyers to 3 sellers.

Copyright 2011 eToro Blog

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