Stocks struggle to stay higher

NEW YORK (CNNMoney.com) -- Weaker than expected new home sales reading and signs of flagging consumer confidence weighed on stocks Tuesday, as major gauges struggled to hold onto early gains.

The Dow Jones industrial (up 18.69 to 13,370.74, Charts) average and the tech-laden Nasdaq (up 7.83 to 2,584.91, Charts) rose about 0.1 percent about an hour. The broader S&P 500 (up 3.98 to 1,501.72, Charts) was barely changed.

The pace of new home sales fell 1.6 percent to 915,000 in May, the Commerce Department reported. Economists surveyed by Briefing.com forecast a decline in the annual pace of home sales to 925,000 homes, down from a 981,000 pace in April when sales were spurred by a large drop in prices.

Investors also digested the latest consumer confidence reading, which fell more than expected to its lowest level in 10 months. The Conference Board reported that its consumer sentiment index fell to 103.9 in June. Economists surveyed by Briefing.com were forecasting that index will slip to 106.

Wall Street rallied for most of the session Monday after a weak existing home sales report soothed concerns that the Federal Reserve will begin raising interest rates anytime soon.

But gains evaporated late in the day on renewed fears about big losses by hedge funds invested in securities backed by subprime mortgages.

Oil prices dropped nearly $1 a barrel in early trading, as U.S. light crude for August lost 98 cents to $68.20 a barrel.

Treasury prices held steady, leaving the yield on the benchmark 10-year note at 5.08 percent level, unchanged from late Monday.

On the earnings front, Lennar (down $0.78 to $37.97, Charts, Fortune 500), the nation's largest home builder by revenue, reported an unexpected loss before the market open and warned of continued losses in the third quarter. Lennar shares fell nearly 1 percent on the New York Stock Exchange.

Tech bellwether Oracle (down $0.05 to $19.43, Charts, Fortune 500) is due to report results after the close Tuesday. Analysts are forecasting improved results there.

In corporate news, Rupert Murdoch's News Corp. (down $0.08 to $23.42, Charts, Fortune 500) and Dow Jones (up $0.56 to $58.06, Charts) could announce a deal over the editorial independence of the Wall Street Journal as early as today, the Journal reported.

Such an agreement would pave the way for News Corp. to buy Dow Jones. News Corp. has made a $5 billion bid for Dow Jones. Dow Jones shares were nearly 1 percent higher on the New York Stock Exchange.

Overseas, Swiss drugmaker Roche (up $0.40 to $85.70, Charts) made a hostile $3 billion bid late Tuesday for Ventana Medical Systems (up $25.25 to $76.99, Charts), which makes systems used to diagnose and treat cancer and infectious diseases. Ventana shares soared nearly 49 percent on the news.

An adviser to the Dutch Supreme Court said that ABN Amro (up $0.30 to $46.20, Charts) should not put the sale of the U.S. subsidiary LaSalle to a shareholder vote, a decision that could clear the way for Bank of America (up $0.26 to $49.11, Charts, Fortune 500) to buy LaSalle.

In global trade, European shares moved lower, and most markets in Asia finished the session lower. The dollar edged higher against the euro but eased versus the yen.

COMEX gold for August fell $5.60 to $649.10.