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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (54092)	10/12/2001 1:26:49 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Consumer Sentiment Rises in October Oct 12 10:42am ET By Eric Burroughs NEW YORK (Reuters) - U.S. consumer confidence unexpectedly rose in October despite mounting layoffs in the first report on sentiment to fully reflect the impact of the Sept. 11 attacks, but the index remains well below levels seen this summer, market sources said on Friday. The University of Michigan's preliminary October consumer sentiment index rose to 83.4 in October from 81.8 in September, market sources said, driven by brightening expectations about the economy's prospects. Economists polled by Reuters had forecast a drop to 76.1. Sources said the report would have included responses taken since the start of the U.S.-led air strikes against Afghanistan last Sunday. The rise, even as companies have stepped up layoffs, broke a three-month string of declines. In September the index registered its largest one-month drop since the outbreak of the Gulf War crisis in 1990. Analysts said the stock market's recovery in recent weeks buoyed consumer hopes. The expectations index, which tracks consumers' attitudes about the coming year, rose to 77.9 in October from 73.5 in September. "This tells us that the significant improvement in the stock market since the beginning of the month was probably a key factor. That gave people hope that while the economy is clearly in trouble now, there may be light at the end of the tunnel," said Anthony Karydakis, senior financial economist at Banc One Capital Markets. Since the start of the month, the technology-heavy Nasdaq Composite Index has surged more than 14 percent while the broader S&P 500 index has gained more than 4 percent. Both indexes rose above pre-attack levels on Thursday. Economists closely watch consumer confidence because they fear a sharp drop could lead to weaker consumer spending. Earlier, the government reported retail sales plunged 2.4 percent in September, its sharpest monthly drop in at least nine years, and economists are looking to see if those declines continue. Consumer spending drives about two-thirds of U.S. economic activity. The rise in confidence helped stocks recover somewhat from earlier losses and sent prices on U.S. Treasuries sliding, while the dollar pared losses suffered after the grim retail sales report. The current conditions index, a gauge of Americans' views of their present financial situation, fell to 92.1 from 94.6 in September. "In terms of the near-term impact on the economy the current conditions index has a stronger relationship to spending and that suggests spending is going nowhere by the consumer over the balance of the year," said Chris Wiegand, an economist at Salomon Smith Barney in New York. The University of Michigan's preliminary survey is based on 250 telephone interviews with Americans across the country and will be updated later in the month.