By Rodrigo Campos

But the Nasdaq edged higher, buoyed by gains in the biotechnology sector a day after Amgen's strong quarterly earnings report.

The U.S. consumer confidence index declined more than expected in July, a second consecutive monthly fall, as a sluggish labor market continued to worry consumers, the Conference Board said.

Amgen shares rose 3.2 percent to $62.70 following the company's release of much better-than-expected second-quarter earnings after Monday's closing bell. The Dow Jones biotechnology index <.DJUSBT> rose 2 percent.

But the energy sector's shares weighed on the broader market as the weak consumer confidence data took a toll on oil futures prices, which had risen on optimism about the economic recovery. U.S. front-month crude futures dropped $1.15, or 1.7 percent, to settle at $67.23 a barrel. The S&P energy index <.GSPE> slid 1.9 percent.

Exxon Mobil Corp , down 1.4 percent at $71.71, was the top drag on the Dow industrials.

With the price of oil and other commodities retreating, the market is taking "a bit of a breather," said Craig Miller, vice president of healthcare trading at Stifel Nicolaus in Baltimore.

He said the weak consumer confidence data gave investors "a reason to sell" some shares, while Amgen's results were bolstering biotech stocks.

The Dow Jones industrial average <.DJI> slipped 32.42 points, or 0.36 percent, to 9,076.09. The Standard & Poor's 500 Index <.SPX> fell 4.66 points, or 0.47 percent, to 977.52. But the Nasdaq Composite Index <.IXIC> edged up 1.30 points, or 0.07 percent, to 1,969.19.

Strong earnings had given a second wind to a stock market rally that wilted in June after pushing the S&P 500 up about 40 percent from its 12-year closing lose in March.

But lowered expectations have shifted the focus to earnings, which have in some cases failed to impress.

Office Depot , the No. 2 U.S. office supply retailer, reported a bigger-than-expected quarterly loss as the recession hurt demand from corporate customers. The stock slid 17.6 percent to $4.41.

U.S. Steel Corp shares fell 1.7 percent to $40.58 after the company reported a quarterly loss and said it expected all of its business sectors to operate in the red in the third quarter.

Earlier on Tuesday, Standard & Poor's/Case-Schiller released data that showed U.S. single-family home prices rose in May from April, the first monthly growth in three years.

(Editing by Jan Paschal)