Stocks hold gains after consumer confidence data
NEW YORK -- Stocks showed more signs of stability Tuesday as investors shook off a record low reading on consumer confidence and placed some moderate bets in the last days of a brutal 2008.
The Conference Board's consumer confidence index dropped to 38 in December from a revised 44.7 in November, well below the expectation of 45 of economists surveyed by Thomson Reuters.
Investors were well prepared for a disappointing reading after consumers reluctant to spend left retailers with their worst holiday season in years. The International Council of Shopping Centers reported Tuesday that weekly same-store sales dropped 1.5% last week from the 40 retailers it polls.
The market got some support from a slight rise in the Chicago Purchasing Managers Index, which measures manufacturing activity in the Midwest. The index for December crept up to 34.1 from November's 33.8. It is considered a precursor to the national index to be released by the Institute for Supply Management on Friday.
Investors also drew some comfort from the government's decision to provide $5 billion to GMAC Financial Services, General Motors' troubled financing arm. The Treasury Department said late Monday it would provide the money to GMAC Financial Services from the $700 billion bank rescue program. The Federal Reserve last week approved GMAC's application to become a bank holding company, a move that cleared the way for the company to receive money from the financial rescue fund.
The injection is on top of the $17.4 billion in loans the Bush administration agreed to provide to the auto industry on Dec. 19. GMAC said Tuesday it would immediately resume lending to certain customers it had previously said were too great a risk for auto loans because of tight credit markets.
With many traders away for the holidays, stocks have shown small moves in light volume in recent sessions. Most investors are looking past 2008 for clues about how stocks will fare in the coming year. The major stock market indicators are down 36% to 43% for the year.
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