Consumer confidence lifts Wall Street

After several days of declines, finally buyers have mounted an assault on the market, stirred into action by the surprising strength of consumer confidence this month.

Although having eased back a little from the highs of the day, the major US stock indices were still up a fair amount by early afternoon on Wall Street. The Dow was 0.54% higher at 15,923, a similar move to the S&P 500 index which gained 0.57% to 1791.7.

It’s been tougher for the NASDAQ 100, which fell 0.36%, as the index is more influenced by losses in Apple. The iPhone maker has fallen more than 7% today after last night’s results disappointed investors. Although Apple beat expectations with its earnings, its iPhone sales failed to meet forecasts, despite setting a new record.

Other high-profile results have been quite good, with Pfizer and Ford Motor Co both beating expectations with their quarterly earnings.

The biggest lift to the market came from the Conference Board’s consumer confidence index, which surged to a reading of 80.7, comfortably higher than the 78.1 that had been forecast by a Reuters poll of analysts. The present situation component jumped 3.8 points to a post-financial crisis high of 79.1 and there was also strength in the income expectations. Such a strong result for consumer confidence raises hopes that consumer spending will improve this month, which would surely provide a shot in the arm for the US economy.

The sentiment in the financial markets certainly appears to be more risk-hungry today than we’ve seen for the last few trading sessions, which has dented safe-haven assets such as gold and the Japanese yen. Spot gold sunk 0.52%, while the US dollar rose 0.37% against the yen.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.