July 28, 2004

11,000 = 50:

Consumer Confidence Soars, Housing Strong (Mark Felsenthal, July 27, , 2004, Reuters)

U.S. consumer confidence surged to a two-year high this month on hiring hopes while new home sales in June posted a smaller decline than expected, according to two reports on Tuesday that signaled the economy may be picking up after a brief hiatus.

The Conference Board, a private forecasting group, said its consumer sentiment gauge climbed in July for the fourth straight month to 106.1 from an upwardly revised 102.8 in June, outpacing Wall Street forecasts.

"These are strong numbers. I have no doubt they indicate continuity for the economic expansion, and are a prelude to a second half that is stronger than the first half," said David Littmann, chief economist at Comerica Bank.

Stock markets and the dollar rallied on the buoyant data, while investors dumped safe-haven Treasuries.

The Dow Jones Industrials (DJI) rose 123 points, or 1.2 percent, to 10,085, its biggest gain since early June. The dollar rose to five-week highs against the euro.

U.S. Treasury securities prices slid, as the reports contributed to the biggest two-day sell-off in nearly three months.

A word of advice: don't use a financial analyst who listens to John Kerry instead of the numbers.

Posted by Orrin Judd at July 28, 2004 8:55 AM
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