- The Washington Times - Tuesday, May 26, 2009

UPDATED:

Wall Street closed Tuesday with gains following another increase in consumer confidence.

The Dow Jones Industrial Average closed at 8,473.49, up 196.17 points. The broader Standard & Poor’s 500-stocks Index closed at 910.33, up 23.33 points, and the tech-heavy NASDAQ closed at 1,750.43, up 58.42 points.

The Conference Board’s Consumer Confidence Index increased in May to 54.9, from 40.8 in April, exceeding analysts’ expectations. The index’s benchmark is 100 in 1985.

The monthly increase is the second straight and suggests that consumers are spending again, which would stimulate an economy in a 17-month recession. Consumer spending makes up roughly two-thirds of U.S. economic activity.

Spending-related stocks such as Target Corp. and J.C. Penney Inc. increased following the private research group’s upbeat report.

Target stock closed at $41 a share, up 26 cents. J.C. Penney closed at $26.63, up $1.50.

RELATED ARTICLE: U.S. consumer confidence soars in May

U.S. markets opened amid investor concerns about North Korea’s test of nuclear weapons over the past few days and Standard & Poor’s statement last week that it could lower Britain’s credit rating because of that country’s increasing debt.

The markets are up roughly 25 percent since hitting a 12-year low in early March, largely because most major U.S. banks reported first-quarter earnings that were better than expected, then passed the government’s so-called “stress tests.”

However, investors over the past couple of weeks have been less enthusiastic about optimistic reports and appear more concerned about the markets recovering too fast and growing too big amid such lingering problems as high unemployment, tight credit, a struggling housing market and the global economy.

The S&P-Case Shiller report Tuesday for home prices in 20 major U.S. cities showed an 18.7 percent increase compared with a similar period in 2008.

The gross domestic product for the entire 27-nation European Union shrank 2.5 percent in the first quarter.

Investors also are watching General Motors Corp. approach its June 1 restructuring deadline. The automaker borrowed an additional $4 billion last week from the government, after receiving $15.4 billion.

GM stock closed Tuesday at $1.44, down 1 cent a share.

In overseas trading, Japan’s Nikkei stock average fell 0.39 percent, Britain’s FTSE 100 rose 1.06 percent, Germany’s DAX index rose 1.37 percent, and France’s CAC-40 rose 1.05 percent.


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