Consumer spending rises, but stocks end April on down note

May 1, 2010

Consumers spent more and helped lift the economy last quarter but not enough to ignite the recovery and drive down unemployment.

Spending by consumers rose by the fastest pace in three years, the Commerce Department said Friday . That helped the economy grow at a 3.2 percent pace in the January-to-March quarter. It marked the third straight quarterly gain as the United States heals from the longest and deepest recession since the 1930s.

That news wasn't enought to lift the stock market. The Dow Jones industrial average fell 158 points, and all the major indexes fell more than 1 percent.

Investors lost some of their optimism about the economy after the government's weaker-than-expected gross domestic product report and news of a drop in consumer sentiment. Reports that the government has started a criminal investigation of Goldman Sachs sent financial stocks tumbling. Investors feared that possible charges against the company could have a chilling effect on the banking industry.
 

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