Earnings bright spots vs. gloomy consumer confidence

Small-cap stocks remained higher into mid-session, underpinned by a few bright spots on the earnings front, M&A enthusiasm and confirmation of Timothy Geithner’s appointment as Treasury Department Secretary. However, record low consumer confidence kept some buyers at bay. At 12:22 p.m. ET, the Russell 2000 (NYSE:IWM) was up 6.45, or 1.43%, at 456.39.

The consumer confidence report came in this morning at 37.7, which was below the forecast of 39 and at record lows as consumers fret about sinking house prices and rising unemployment. Speaking of house prices, the Case-Shiller Home Price Index tumbled 18.2% from year-ago levels, which clouded some of the optimism from Monday’s more upbeat existing home sales data.

As for big-cap earnings news, American Express, US Steel and Texas Instruments helped offset weak reports from Verizon Communications and DuPont Co. and provided a small sliver of hope that an awful earnings season will still serve up some glimmer of good news.

Looking at sector activity so far today, coal stocks, steel companies, health-care distributors, diversified banks, motorcycle manufacturers, industrial conglomerates, advertising agencies, office electronics and semiconductor firms were the top performers. On the downside, airlines, oil refiners, electrical equipment manufacturers, telecoms, internet retailers, home improvement retailers, home furnishing retailers and food distributors were the weakest performers.

Looking at airlines, the AMEX Airline Index was off 6.3%, with small-cap carrier US Airways Group Inc. (NYSE:LCC) down 12%. Meanwhile, UAL Corp. (Nasdaq:UAUA) was off about 8%. The big news on the airline front came from big-cap carrier Delta Air Lines Inc. (NYSE:DAL), as the world’s largest firm tumbled 18% . . .

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