IBJNews

U.S. consumer confidence falls to 2-year low

Associated Press
August 30, 2011
Back to TopCommentsE-mailPrintBookmark and Share

Stocks fell Tuesday morning after consumer confidence dropped to the lowest level since April 2009. Retailers and other companies that depend on consumer spending had the steepest losses.

The drop in the Conference Board's Consumer Confidence Index was far worse than analysts expected and only half of the level that indicates a healthy economy. The index plunged 15 points, to 44.5, in August, well below the estimate of 53.3 from economists surveyed by FactSet. The index is usually at 90 or above when the economy is strong.

The sharp fall in the measure of how U.S. consumers feel about the economy could mean weaker sales for retailers and makers of consumer goods like clothes and shoes. Retailers are in the midst of the critical back-to-school shopping season, which can account for as much as 25 percent of their annual revenue.

The Dow Jones industrial average was down 35 points in early trading, then fell 109 points five minutes after the report came out at 10 a.m. By 10:45 a.m. it was down 76 points, or 0.7 percent, at 11,463.

Companies that rely most heavily on consumer spending fell more than the broader market. Retailer Kohl's Corp. fell 2.5 percent, Nike Inc. fell 1.7 percent and Target Corp. fell 1.4 percent.

Boeing Co. rose 1.3 percent, the most of any company in the Dow, after the aircraft giant said it received approval from its board to build a version of its workhorse 737 jet with a redesigned engine. That should help it better compete with rival Airbus.

The Standard & Poor's 500 fell 11, or 0.9 percent, at 1,199. The NASDAQ composite index fell 19, or 0.8 percent, to 2,541.

Stocks have swung widely in August. The Dow was down as much as 7.4 percent for the year on Aug. 10, but it is now down just 0.9 percent. On Monday, the Dow rose 254 points, its fourth-largest gain this year. Insurers rose the most after it became clear the damage from Tropical Storm Irene wasn't nearly as bad as analysts had feared.

The Standard & Poor's 500 index hit a 2011 low on Aug. 8 after the U.S. government's credit rating was downgraded for the first time. Since then, it has risen 7.3 percent.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

  3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............

ADVERTISEMENT