Wall Street ends 2nd quarter on sour note

NEW YORK: Wall Street shares closed second quarter on a sour note Tuesday after a surprise fall in consumer confidence dented hopes for a recovery in spending to lead the country out of recession.

The Dow Jones Industrial Average shed 82.38 points (0.97 per cent) to close at 8,447.00. The tech-heavy Nasdaq dropped 9.02 points (0.49 per cent) to 1,835.04 and the broad-market Standard & Poor’s 500 retreated 7.91 points (0.85 per cent) to finish at 919.32.

“The main culprit is an unexpected drop in consumer confidence, ending a two-month winning streak in that index,” Charles Schwab & Co.analysts said in a client note. The Conference Board, a business research group, said its consumer confidence index retreated to 49.3 points in June from a revised 54.8 in May.

Most analysts expected a much stronger reading of 55.3 points in the 100-point index. Stocks turned sharply lower as investors digested the surprising decline in confidence which suggested recession-weary consumers were not ready to open their wallets to boost the spending that drives two-thirds of US economic activity.

“This latest setback in consumer sentiment does not auger well for any near-term revival in consumer spending,” said Brian Bethune of IHS Global Insight. Bethune warned that the government’s massive economic stimulus efforts may “run the risk of engineering the biggest fiscal stimulus ’dud in post-World War II history.”

“Despite the huge cash incentives being dangled in front of consumers to purchase homes — and prospectively to trade in gas-guzzling auto clunkers — households are not going for the bait,” he said. -- AFP