S&P 500 Index Closes at Record After Drop in Consumer Confidence
The Standard & Poor’s 500 Index closed at record for a second straight day, as investors speculated the Federal Reserve would continue to support economic growth after data showed an unexpected drop in consumer confidence and weak factory output.
The S&P 500 rose 0.1 percent to 2,122.70 at 4 p.m. in New York. The gauge added 0.3 percent this week for its first back-to-back weekly gain in more than a month.
“The data plays into the renewed concern that economy in the second quarter will move at a glacial place, renewing hope that the Fed won’t move aggressively in 2015,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co., which oversees about $170 billion. “The market is listless today and you had a big move yesterday that took everybody by surprise on the back of economic data.”
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Consumer confidence unexpectedly fell in May by the most in more than two years, as the University of Michigan preliminary index of sentiment dropped to the lowest since October.A separate report showed factory production stalled in April, following a 0.3 percent March gain that was larger than previously estimated. The data add to previous reports that suggest economic growth isn’t strong enough to warrant higher interest rates. Inflation ContainedA report Thursday showed wholesale prices unexpectedly declined in April, indicating inflation is well-contained as Fed officials weigh when to raise the benchmark rate. Concern the Fed would raise interest rates even with worsening economic data and predictions for earnings declines have whipsawed stocks between gains and losses in the past six weeks.More from Bloomberg.com: Petrobras Earnings in Focus as Ibovespa Erases Weekly DeclineSigns that the global bond market selloff has run its course and the dollar’s retreat yesterday spurred gains in multinational companies, helping the S&P 500 erase declines earlier in the week and close at a new high. The weaker dollar lessens the drag on the economy and corporate profits as it makes exports more competitive.With the earnings season drawing to a close, S&P 500 members are now on track to deliver income growth of 0.4 percent in the first quarter, compared with projections for a 5.8 percent decline as recently as March. Out of 460 S&P 500 companies that have reported earnings, 72 percent have beaten earnings expectations, while 47 percent have exceeded sales estimates.More from Bloomberg.com: Canada to Regulate Oil and Gas Emissions With New 30% Target
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