Stocks gain after Bernanke, economic news
NEW YORK -- The stock market managed to carve out modest gains amid news of a rebound in consumer confidence and more healing in the housing industry.
Financials, retailers and homebuilders were the day's biggest winners. A sharp drop in energy stocks kept a lid on the market's advance.
While investors were pleased by positive reports on consumers and housing, trading was choppy, as it has been in recent sessions.
The Dow Jones industrial average surged more than 100 points immediately after the confidence report was released, but came off its highs shortly after. The blue-chip index closed at 9,539.29, up 30.01, or 0.32%. The other major stock indexes also pulled back. The Standard & Poor's 500 index finished at 1,028.00, up 2.43, or 0.24%. The Nasdaq composite index rose 6.25, or 0.31%, to 2,024.23.
The Conference Board's consumer confidence index rose to 54.1 this month from an upwardly revised 47.4 in July and far above the 47.5 reading analysts expected.
Despite the improvement, the reading is still a long way from showing that consumers are actually feeling optimistic about the economy, which is vital to any potential recovery. Investors' concerns about flagging consumer confidence have triggered bouts of stock selling in recent weeks.
Stocks got a boost from President Obama's reappointment of Bernanke as Federal Reserve chairman and a jump in home prices.
Bernanke's reappointment, though expected, came sooner than anticipated and removed any uncertainty about a potential replacement. Bernanke's aggressive moves to limit the damage from the financial crisis, including keeping interest rates at historic lows, have been credited with guiding the economy away from its worst recession since the 1930s.
Meanwhile, the Standard & Poor's/Case-Shiller U.S. National Home Price Index rose 1.4% in the second quarter from the January-March period, the first quarterly increase in three years. Home prices, while still down almost 15% from last year, are at levels last seen in early 2003.
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