US stocks rise after sharp jump in consumer confidenceMay 27th, 2009 - 6:29 am ICT by IANS
New York, May 27 (DPA) Stocks climbed more than two percent across the board Tuesday following a dramatic leap in consumer confidence to 54.9 in May, an eight-month high and a steep rise from 40.8 in April.
Wall Street’s three benchmark indices gained for the first time in five sessions, spurred by optimism that the worst of the recession is over. Markets were closed Monday for the observance of US Memorial Day.
The New York-based Conference Board said Tuesday that the consumer confidence index showed the biggest one-month gain since 2003.
Lynn Franco, head of consumer research at the board, attributed the leap in confidence to improvements in current conditions and forecasts that the second quarter contraction will be less severe than in the first quarter.
“Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labour market and incomes will improve in the coming months,” she said. “While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us.”
JP Morgan Chase & Co, Home Depot Inc and American Express Co climbed at least four percent. Apple Inc gained 6.8 percent after being upgraded at Morgan Stanley, which said the demand for iPhones has been underestimated, the Bloomberg financial news service reported.
The blue-chip Dow Jones Industrial Average climbed 196.17 points, or 2.37 percent, to 8,473.49. The broader Standard & Poor’s 500 Index rallied 23.33 points, or 2.63 percent, to 910.33. The technology-heavy Nasdaq Composite Index soared 58.42 points, or 3.45 percent, to 1,750.43.
The gains followed lesser increases in European markets, where Germany’s DAX index added 1.37 percent and London’s FTSE 100 gained 1.06 percent.
The US currency gained against the euro to 71.49 euro cents from 71.44 euro cents Friday. The dollar also gained against the Japanese currency to 94.99 yen from 94.78 yen Friday.
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