Confidence Reading Pushes Industrials Above
big uptick in consumer-confidence data and a
handful of improved earnings reports helped
shake buyers out of their summer siesta, sending
the Dow industrials solidly back above 10000
Tuesday. After three days of selling, the Dow
Jones Industrial Average climbed 123.22, or
1.2%, to 10085.14, bolstered by big gains in
Verizon Communications. The Nasdaq Composite
Index grew 30.08, or 1.6%, to 1869.10 and the
S&P 500-stock index rose 10.76, or 1%, to
1094.83. Treasury prices tumbled. Consumers'
view of the economy hit its highest reading
in more than two years, lifted by improving
conditions in the labor market. The Conference
Board, a private research group, said its index
of consumer confidence in July moved to a better-than-expected
106.1 after rising to a revised 102.8 the month
before (see chart on right).
July reading was the best since June 2002, and
beat economists' expectations of 102.2. "The
spring turnaround has been fueled by gains in
employment, and unless the job market sours,
consumer confidence should continue to post
solid numbers," said Conference Board economist
Lynn Franco. Some market watchers said the report
indicated good things about consumer spending
going forward, and that what appeared to be
a soft patch last month may have just been temporary.
"With some of the exogenous negative events
-- most notably, the Iraq prison abuse scandal
and the gasoline price spike -- that dampened
optimism behind us, the steadily improving economic
fundamentals are leading to an uptrend in confidence
that seems to be gathering momentum in June
and July," said Steve Stanley, chief economist
at RBS Greenwich Capital in Greenwich, Conn.
"The consumer is not nearly as fragile
as some analysts are suggesting."
Wall Street Journal online