Drop in consumer confidence weighs on Wall Street

Written by Agencies
Wednesday, 30 September 2009 07:44

NEW YORK: US stocks closed lower on Tuesday, Sept 28 after a surprise drop in consumer confidence weighed on investors' sentiment,according to wire reports.

The Dow Jones industrials fell 47.16 points, or 0.5%, to 9,742.20, giving up about a third of Monday's 124-point gain. The S&P 500 index slipped 2.38 points, or 0.2% to 1,060.60, and the Nasdaq composite index fell 6.70 points, or 0.3%, to 2,124.04.

Stocks slid after the Conference Board said its consumer confidence index fell in September. Economists had been expecting a reading of 57; instead it came in at 53.1.

Despite the decline, the major indexes are likely to end September and the third quarter of 2009 with gains. Historically, September is the worst month of the year for stocks.

US consumers are still worried about losing their jobs. Many analysts warn a turnaround in the economy won't hold if consumers don't start picking up spending and employers add jobs.

The report offset early enthusiasm over an increase in home prices.

Stocks broke a three-day losing streak on Monday after news of several big acquisitions signaled to investors that corporate America is feeling more confident about the economy and willing to take on more risk through mergers and acquisitions.

"You had these M&A deals make people feel better about growth prospects and valuations," said Nick Kalivas, vice president of financial research and senior equity index analyst at MF Global. "We don't have any follow-through M&A today and the market really lacks a forward catalyst."

With economic reports still mixed, some investors are hesitant to keep buying and extend the market's nearly seven-month advance, or at least keep it going at the same fervid pace. The benchmark Standard & Poor's 500 index has gained 56.8% since hitting a 12-year low in March. - Agencies