Rising consumer confidence lifts stocks; tech sector soars

Associated Press

NEW YORK — U.S. stocks rebounded Tuesday and climbed after a survey showed consumer confidence is at a nine-year high, a sign Americans will keep spending in the months to come. Technology and consumer stocks made the largest gains.

The market opened lower after two days of losses but quickly recovered. The consumer confidence report gave major indexes a boost and they locked in a big gain by early afternoon.

Technology companies jumped, and solid results from cruise line operator Carnival sent travel-related companies higher. Energy companies slumped with oil prices as hopes for an international cut in fuel production faded.

U.S. consumer confidence reached its highest level this month since August 2007, according to the Conference Board. The group said its index rose to 104.1 as consumers grew more optimistic about the labor market. The result was better than expected.

Katie Nixon, chief investment officer for Northern Trust, said it’s even more important right now because government spending, exports, and capital spending by businesses are all limited.

“Everything’s riding on the consumer right now,” she said. Recently investors have worried about consumer spending because of disappointing auto sales and retail sales.

After its slow start, the Dow Jones industrial average jumped 133.47 points, or 0.7 percent, to 18,228.30. The Standard & Poor’s 500 index picked up 13.83 points, or 0.6 percent, to 2,159.93. The Nasdaq composite gained 48.22 points, or 0.9 percent, to 5,305.71.

Economists had expected consumer confidence would fall in September. That’s partly because of disappointing reports on car and retail sales earlier this month. Investors have been wondering if consumers would spend enough to keep the economy growing at a steady pace.

Amazon rose $16.95, or 2.1 percent, to $816.11 as consumer stocks made big moves. Netflix, which has slumped this year after its stock doubled in 2015, regained $2.51, or 2.7 percent, to $97.07. Microsoft helped pull tech stocks higher as it picked up $1.05, or 1.8 percent, to $57.95. IBM advanced $2.79, or 1.8 percent, to $156.77.

Oil prices fell after investors were disappointed again that OPEC countries didn’t make a deal to limit production. A representative for Iran said there probably won’t be any such agreement this week and that oil-producing nations should discuss the issue in November.

U.S. crude fell $1.26, or 2.7 percent, to $44.67 a barrel in New York. The international standard, Brent crude, lost $1.38, or 2.9 percent, to $45.97 a barrel in London. Oil prices rose 3 percent on Monday. Devon Energy lost $1.26, or 3.2 percent, to $38.38 and ConocoPhillips sank 59 cents, or 1.5 percent, to $39.43.