Stocks rally after jump in consumer confidence
NEW YORK — Stocks are rallying after a report that shows consumers are starting to feel a little more confident about the economy.
The Conference Board’s Consumer Confidence index rose to 54.1 this month from 46.6 in July and far above the 47.5 reading analysts expected.
While the reading is still a long way from showing that consumers are actually feeling optimistic about the economy, the improvement is encouraging. Investors’ concerns about flagging consumer confidence have triggered bouts of stock selling in recent weeks.
Stocks were already rising moderately prior to the report, getting a boost from President Barack Obama’s reappointment of Ben Bernanke as Federal Reserve chairman and a jump in home prices.
The Dow Jones industrial average is up 92 at 9,601.64. The Standard & Poor’s 500 index is up 10 at 1,035, while the Nasdaq composite index is up 14 at 2,032.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
NEW YORK (AP) — Investors put stocks back on an upward path Tuesday on news of Ben Bernanke’s reappointment as Federal Reserve chairman and a jump in home prices.
The gains came amid mixed trading in overseas markets. Asian markets fell on more economic concerns in China, while European markets moved slightly higher.
Bernanke’s reappointment, though expected, removes any uncertainty about a potential replacement. Bernanke’s aggressive moves to limit the damage from the financial crisis, including keeping interest rates at historic lows, have been credited with guiding the economy away from its worst recession since the 1930s.
Meanwhile, a closely watched index shows home prices posted their first quarterly increase in three years, yet another sign that the housing market has turned the corner. The Standard & Poor’s/Case-Shiller’s U.S. National Home Price Index rose nearly 3 percent from the first quarter, though was still down almost 15 percent from the second quarter last year.
Investors were also awaiting the latest report on consumer confidence. A recovery among consumers is considered vital to any potential economic rebound because their spending accounts for more than two-thirds of all economic activity.
Economists are expecting the Conference Board’s Consumer Confidence Index to rise to 47.5 from 46.6 in July. Despite the expected improvement, consumers’ confidence remains fragile amid ongoing job losses. A reading above 90 means the economy is on solid footing.
In early trading, the Dow Jones industrial average rose 63.33, or 0.7 percent, to 9,572.61. The Standard & Poor’s 500 index rose 6.64, or 0.7 percent, to 1,032.21, while the Nasdaq composite index rose 11.00, or 0.6 percent, to 2,028.98.
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