NEW YORK (AP) -- Consumer confidence crumbled in April as rising gasoline prices undermined how Americans feel about the prospects for economic growth, a widely watched gauge of the economy showed on Tuesday.
The New York-based Conference Board said its Consumer Confidence Index dropped to 104.0, in April, down from a revised 108.2 in March. Analysts had expected a reading of 105. The April reading was the lowest since August, when the index was at 100.2.
The Present Situation Index, which measures how shoppers feel now about economic conditions, decreased to 131.3 from 138.5 in March. The Expectations Index, which measures consumers' outlook for the next six months, declined to 85.8 from 87.9.
"Unlike the decline in March, which was solely the result of apprehension about the short-term outlook, this month's decline was a combination of weakening expectations and a less favorable assessment of present-day conditions," said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement. "Rising prices at the gas pump continue to play a key role in dampening consumers' short-term expectations."
Tuesday, April 24, 2007
Home sales: Worst drop in 18 years
NEW YORK (CNNMoney.com) -- Home sales posted their sharpest drop in 18 years in March, a real estate group said Tuesday, as problems in the subprime mortgage sector pushed sales well below what economists had forecast.
Sales of existing homes fell 8.4 percent to an annual rate of 6.12 million in March from February's 6.68 million rate, the National Association of Realtors said. It was the biggest one-month drop since January 1989. Economists surveyed by Briefing.com had forecast sales would fall to an annual rate of 6.45 million in March.
David Lereah, the Realtors' chief economist, said that bad weather earlier in the year may have cut down on sales that closed in March. But he acknowledged a hit from tighter lending standards in the subprime mortgage sector, which most likely made it more difficult for buyers without topflight credit to get financing to buy a home.
Sales of existing homes fell 8.4 percent to an annual rate of 6.12 million in March from February's 6.68 million rate, the National Association of Realtors said. It was the biggest one-month drop since January 1989. Economists surveyed by Briefing.com had forecast sales would fall to an annual rate of 6.45 million in March.
David Lereah, the Realtors' chief economist, said that bad weather earlier in the year may have cut down on sales that closed in March. But he acknowledged a hit from tighter lending standards in the subprime mortgage sector, which most likely made it more difficult for buyers without topflight credit to get financing to buy a home.
Dow inches closer to 13,000
NEW YORK (CNNMoney.com) -- The Dow industrials rose Tuesday, moving ever closer to the 13,000 mark, while the broader market struggled as investors weighed upbeat corporate earnings and lower oil prices with weaker readings on housing and consumer confidence.
The Dow Jones industrial average (up 34.54 to 12,953.94) added 0.3 percent, retreating after hitting an intraday record of 12,989.86 during the session. It ended just a few points shy of the record closing high of 12,961.98 reached Friday.
Treasury prices rose, lowering the corresponding yields. The dollar fell versus the euro and was little changed versus the yen. Oil prices dropped two percent and gold prices slipped.
The Dow Jones industrial average (up 34.54 to 12,953.94) added 0.3 percent, retreating after hitting an intraday record of 12,989.86 during the session. It ended just a few points shy of the record closing high of 12,961.98 reached Friday.
Treasury prices rose, lowering the corresponding yields. The dollar fell versus the euro and was little changed versus the yen. Oil prices dropped two percent and gold prices slipped.
Analysts Predict Auto Sales Slowdown
Soft auto sales in April could spell trouble down the road for Detroit's three automakers as they restructure and try to entice buyers away from strong foreign brands, according to several industry analysts.
Five industry analysts predicted that U.S. sales will be down in April compared with the same month in 2006, and in a down market that continues to shift from trucks to cars, that means trouble for Detroit.The analysts said there doesn't seem to be any pent-up demand for vehicles. Consumers either have too much debt, are facing increased payments due to rising adjustable rate mortgages or are waiting to see what happens to gasoline prices.Under those circumstances, it will be difficult for the Detroit Three to execute their turnaround plans because they're competing for a shrinking market mainly against Honda Motor Co. and Toyota Motor Corp., which both have strong car brands."It's a very tough environment out there right now," said Joe Barker, senior manager of global sales analysis for CSM Worldwide, an automotive forecasting firm in Northville. "If you're undergoing a restructuring at the same time that you're trying to go after a smaller pool of consumers, it just adds to the complexity of a turnaround plan."Ford Motor Co., General Motors Corp. and DaimlerChrysler AG's Chrysler Group are all at varying stages of turnarounds. All have lost billions in recent years as Toyota and Honda have increased their market share. GM actually made money in the fourth quarter of 2006 and by most accounts is ahead of its U.S.-based counterparts in restructuring.
Five industry analysts predicted that U.S. sales will be down in April compared with the same month in 2006, and in a down market that continues to shift from trucks to cars, that means trouble for Detroit.The analysts said there doesn't seem to be any pent-up demand for vehicles. Consumers either have too much debt, are facing increased payments due to rising adjustable rate mortgages or are waiting to see what happens to gasoline prices.Under those circumstances, it will be difficult for the Detroit Three to execute their turnaround plans because they're competing for a shrinking market mainly against Honda Motor Co. and Toyota Motor Corp., which both have strong car brands."It's a very tough environment out there right now," said Joe Barker, senior manager of global sales analysis for CSM Worldwide, an automotive forecasting firm in Northville. "If you're undergoing a restructuring at the same time that you're trying to go after a smaller pool of consumers, it just adds to the complexity of a turnaround plan."Ford Motor Co., General Motors Corp. and DaimlerChrysler AG's Chrysler Group are all at varying stages of turnarounds. All have lost billions in recent years as Toyota and Honda have increased their market share. GM actually made money in the fourth quarter of 2006 and by most accounts is ahead of its U.S.-based counterparts in restructuring.
Stocks Recover, Close Mixed on Earnings
Wall Street was mixed Tuesday, recovering from an early loss as investors shrugged off disappointing housing and consumer confidence data to focus on stronger-than-expected quarterly earnings. The Dow Jones industrials set a new trading high, and resumed their trek toward 13,000.
The market picked up momentum in mid-afternoon. Investors seemed to lose some of the earlier caution they adopted after the National Association of Realtors reported sales of existing homes in March had their biggest one-month decline since January 1989. Also, the Conference Board reported consumer confidence fell more than expected in April due to higher gas prices and broader economic concerns.Robust first-quarter earnings reports have been driving the market higher over the past week, allowing the Dow to approach 13,000, and there were more upbeat results cheering the market on Tuesday: from U.S. military contractor Lockheed Martin Corp., Dow industrials AT&T Inc. and Dupont Co., and chip maker Texas Instruments Inc."'A general optimistic tone related to better-than-expected earnings is what's moving it,"' said Richard E. Cripps, chief market strategist for Stifel Nicolaus, a broker based in St. Louis. However, "'it's not a market that's necessarily very broad in its advance."'He pointed out that the Dow's strong gains in afternoon trading were driven by only a few companies, notably International Business Machines Corp. and Honeywell International Inc., which both made dividend announcements. Also, there were much smaller moves in the broader Standard & Poor's 500 and Nasdaq composite indexes - which so far this year have risen by greater percentages than the Dow.
The market picked up momentum in mid-afternoon. Investors seemed to lose some of the earlier caution they adopted after the National Association of Realtors reported sales of existing homes in March had their biggest one-month decline since January 1989. Also, the Conference Board reported consumer confidence fell more than expected in April due to higher gas prices and broader economic concerns.Robust first-quarter earnings reports have been driving the market higher over the past week, allowing the Dow to approach 13,000, and there were more upbeat results cheering the market on Tuesday: from U.S. military contractor Lockheed Martin Corp., Dow industrials AT&T Inc. and Dupont Co., and chip maker Texas Instruments Inc."'A general optimistic tone related to better-than-expected earnings is what's moving it,"' said Richard E. Cripps, chief market strategist for Stifel Nicolaus, a broker based in St. Louis. However, "'it's not a market that's necessarily very broad in its advance."'He pointed out that the Dow's strong gains in afternoon trading were driven by only a few companies, notably International Business Machines Corp. and Honeywell International Inc., which both made dividend announcements. Also, there were much smaller moves in the broader Standard & Poor's 500 and Nasdaq composite indexes - which so far this year have risen by greater percentages than the Dow.
Home Sales and Consumer Confidence Slide
The economy provided a sobering reminder Tuesday that consumers are jittery and the housing market is still a major cloud over growth.
In February, U.S. home prices fell their steepest in almost 15 years. Sales of existing homes plunged in March by the largest amount in nearly two decades. And consumer confidence in April crumbled to its lowest since August. It was a hat trick of bad economic data that analysts said would trap the Federal Reserve between inflation pressures and tepid growth. "The Fed is still talking tough on inflation but I think they are watching the slowdown in the economy. They would not want to raise rates if the economy remains weak," said Gary Thayer, chief economist at AG Edwards & Sons Inc. "We are not out of the woods on housing. And consumers are not feeling good about the economy. I don't think we will see a lot of spending on the part of consumers," he said. The poor economic data also offset the positive feeling investors were getting about better-than-expected first-quarterly reports from the likes of International Business Machines Corp. and DuPont Co. The Dow Jones industrial average slipped in early trading before recovering in the afternoon, adding 34.05, or 0.26 percent, to 12,953.46.
In February, U.S. home prices fell their steepest in almost 15 years. Sales of existing homes plunged in March by the largest amount in nearly two decades. And consumer confidence in April crumbled to its lowest since August. It was a hat trick of bad economic data that analysts said would trap the Federal Reserve between inflation pressures and tepid growth. "The Fed is still talking tough on inflation but I think they are watching the slowdown in the economy. They would not want to raise rates if the economy remains weak," said Gary Thayer, chief economist at AG Edwards & Sons Inc. "We are not out of the woods on housing. And consumers are not feeling good about the economy. I don't think we will see a lot of spending on the part of consumers," he said. The poor economic data also offset the positive feeling investors were getting about better-than-expected first-quarterly reports from the likes of International Business Machines Corp. and DuPont Co. The Dow Jones industrial average slipped in early trading before recovering in the afternoon, adding 34.05, or 0.26 percent, to 12,953.46.
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