Stocks of Retailers Surge on Consumer Optimism

After a report showing increased consumer confidence, stocks in the U.S. rose following several days of declines. At the New York Stock Exchange on Tuesday, Glenn Pohs worked on the exchange’s options floor.

The New York Times - After several days of declines on concerns about the government’s borrowing needs and the soundness of the dollar, stock markets rebounded Tuesday on a surprising bounce in consumer confidence. The private Conference Board reported that consumer sentiment rose again in May, hitting its highest levels in eight months.

As traders returned to Wall Street after the holiday weekend, the glints of good news in those numbers were enough to outweigh other figures showing that housing prices continued to tumble as fast as ever. Every sector of the Standard & Poor’s 500-stock index was higher, led by financial stocks and consumer-geared companies like McDonald’s, the Home Depot and Lowe’s home improvement chains, and the Walt Disney Company.

The Dow Jones industrial average was up 196.17 points, or 2.37 percent, to 8,473.49, while the S.& P. 500 was 2.6 percent, or 23.33 points, higher at 910.33.

The technology-focused Nasdaq outpaced other indexes, rising 3.5 percent, or 58.42 points, to 1,750.43, on gains among computer makers, search engines and Internet firms as analysts upgraded Apple. Apple, the maker of iPhones and iPods, rose 6.8 percent to $130.78 a share.

Big banks like Goldman Sachs, Wells Fargo and JPMorgan Chase closed higher, bolstered by optimism that improving consumer sentiment could translate into stability for the financial system. Investors also edged back toward the dollar, a week after they pushed it to its lowest point in five months on concerns about inflation, the expanding supplies of new currency and big federal deficits. The dollar index, which measures the dollar’s performance against six major currencies, was up 0.1 percent.

As the dollar gained ground, gold prices fell moderately.

The jump in consumer confidence also helped the oil markets, where prices settled 78 cents higher, to $62.45 a barrel.http://www.nytimes.com/2009/05/27/business/27markets.html

Consumer Confidence Rose Sharply in May

Associated Press - A private research group said Tuesday that consumer confidence in May soared to the highest level since last September amid tentative signs that the economy was improving.

The Conference Board said that its Consumer Confidence Index, which had sharply increased in April, zoomed past economists’ expectations to 54.9, from a revised 40.8 in April.

Economists surveyed by Thomson Reuters were expecting 42.3.

The reading marks the highest in eight months, when the level was 61.4. The levels are also closer to the year-ago reading of 58.1.

The present situation index, which measures how shoppers feel now about the economy, rose to 28.9 from 25.5 last month. But the Expectations Index, which measures shoppers’ outlook over the next six months, climbed to 72.3 from 51.0 in April.

“Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement. “While confidence is still weak by historic standards, as far as consumers are concerned, the worst is now behind us.”

The upbeat reading was good news for merchants, which are counting on consumers to be in the mood to spend, after confidence plummeted to record lows.

The Consumer Confidence survey — whose responses were received through May 19 from a representative sample of 5,000 households — showed a marked improvement in consumers’ outlook for jobs. The percentage of consumers expecting more jobs in the months ahead increased to 20.0 percent, from 14.2 percent, while those anticipating fewer jobs declined to 25.2 percent, from 32.5 percent. The proportion of consumers anticipating an increase in their incomes edged up to 10.2 percent, from 8.3 percent.http://www.nytimes.com/2009/05/27/business/economy/27consumer.html