Rising Consumer Confidence Boosts Markets

by: Midnight Trader

4:04 PM, Feb 28, 2012 --

Stocks ended higher today, supported by consumer confidence rising to its best levels in a year and reversing downbeat moods following reports earlier today showing an unexpectedly large drop in durable-goods orders as well as further declines in home prices in most metropolitan areas.

A late surge carried the Dow Jones Industrial Average to a close above 13,000 after several attempts in recent days. The day-ending boomlet also lifted the S&P500 past 1,370, pushing past a technical benchmark that had stood since the start of the 2008 financial crisis.

Most industry sectors in the S&P 500 index finished higher, led by technology and consumer technology stocks. Energy company shares faded late in the day as crude oil fell just over $2 to around $108 a barrel in commodities trade. Industrial and utilities stocks also were weak.

In economic news, consumer confidence rose this month, increasing to a 70.8 reading from a revised 61.5 reading in January as improving job prospects trumped worries over spiking gasoline prices. The Conference Board's index increased more than forecast, with experts polled by Bloomberg News expecting a rise for the guage to a 63 reading. The group's measure of present conditions increased to 45 from 38.8 in January. The measure of expectations for the next six months climbed to a one-year high of 88 from 76.7.

The strong results worked to turn around stock prices, which had been trading lower in early-session activity following disappointing durable-goods and home-sales data.

The 4% drop in orders during January for goods meant to last at least three years helped establish a negative tone during late pre-trade activity, with shares reversing course for a first time and trending lower following the 8:30 a.m. ET data release by the Commerce Department. The fall in durable good bookings was the most in three years and exceeded most forecasts for the period by a wide margin, with experts polled by Bloomberg News predicting a 1% dip in orders last month.

Also contributing to the downbeat mood ahead of the starting bell today was the release of the latest S&P/Case-Shiller composite index of home prices in 20 metropolitan areas, sliding to a 136.63 reading in December, the lowest level since January 2003. Prices fell 0.5% on a seasonally adjusted basis during December, matching the consensus forecast of economists polled by Thomson Reuters, and follows a 0.7% drop for prices in November.

In other economic data released today, manufacturing activity in the central Atlantic region advanced during February for the third straight month, according to the Federal Reserve Bank of Richmond. The monthly survey found that the broadest indicators of overall activity --- shipments, new orders and employment --- all remained in positive territory witbh the rate of increase rising considerably since January. Other indicators such as backlogs and capacity utilization also were positive, with delivery times and finished goods inventories growing at a moderately quicker rate.

In company news, Priceline.com (NASDAQ:PCLN) shares are up nearly 7.5% in late morning trading after last night reporting Q4 earnings of $5.37 a share on a 35.6% year-over-year rise to $991 million in revenues. That easily topped the analyst consensus on Thomson Reuters expecting a $5.05 a share profit on $968 million in revenues. The online travel and lodging reservation service also forecast Q1 EPS, excluding non-recurring items, of $3.80 to $3.90 on between $987.4 million to $1.03 billion in revenues during the current quarter. Current Street expectations are for a $3.72-per-share profit and a 25% rise in revenues to about $1.01 billion in revenues.

Also today, shares of Alimera Sciences (NASDAQ:ALIM) are ahead nearly 68% after saying regulators in Great Britain and other European countries are now near approving its Iluvien drug treatment for vision problems associated with diabetes. According to the company, the regulatory process is now beginning the national phase of the Decentralized Procedure where each of the so-called Concerned Member States -- including Austria, France, Germany, Italy, Portugal and Spain -- grants national licenses for the drug.

Commodities settled mixed today, with March gold futures ending up $13.40 at $1,787 an ounce while silver futures settled up $1.61 to reach $37.14 an ounce. Copper was up 3.15 cents at $3.91 a pound.

Crude oil settled lower today, with the April NYMEX contract finishing down $2.01 at $106.55 a barrel. April natural gas also lost ground, settling at $2.519 per 1 million British Thermal Units, down 8.4 cents.

Here's where the markets stood at end-of-day.

  • Dow Jones Industrial Average up 23.61 (+0.18%) to 13,005.12
  • S&P 500 up 4.59 (+0.34%) to 1,372.18
  • Nasdaq Composite Index up 20.60 (+0.69%) to 2,986.76


  • Hang Seng Index up 1.65%.
  • China Shanghai Index up 0.20%
  • FTSE 100 up 0.21%.


(+)ODP, $0.03 a share Q4 profit reverses year-ago loss as sales also rise.

(+)DPZ, Report $0.52 EPS, beats by $0.03; Revenue grow 4.5% to $501.7 million.


(-)PEIX, Q4 EPS misses forecasts by $0.06 despite 53% rise in gallons of ethanol sold.

(-)CECO, Q4 Net Loss was $1.64 a share; new-student enrollment drops 24%.