Consumers Fuel S&P
05/31/07 - 05:38 PM EDT
Liz Rappaport
The stock market cheered the American consumer Thursday.
In all their debt-laden, energy-guzzling glory, consumers were the only thing standing between the economy and a negative growth rate in the first quarter. With an eye to Friday's nonfarm payrolls report, investors drove the S&P 500 to another record with the confidence that if Americans have jobs, they'll keep emptying their wallets. Although first-quarter GDP was revised down to a 0.6% pace, the markets barely blinked because the U.S. consumer put forth the strongest showing since the first quarter of 2004. The government revised personal spending up to 4.4%, from an initial estimate of 3.8%. Consumption added 3% to GDP in the quarter. Retail stocks outperformed Thursday as the S&P 500 finished off its highs of the day, but up just over 1 point to set another record at 1530.62. The Dow Jones Industrial Average ended the day down a hair, or 5 points, at 13,627.64, and the Nasdaq Composite gained 0.5% to close at 2604.47. The NYSE Composite Index, the Russell 2000 and the Dow Jones Transportation Average closed the day at new all-time highs. As if on cue, Prudential's ultra-bullish equity strategist Ed Keon published a note Thursday evening reiterating a forecast that the S&P 500 will end the year at 1650, adding taht it could go to 2000 by 2009. Keon recommends the brokers, which also outperformed Thursday on news that Wachovia(WB Quote - Cramer on WB - Stock Picks) is buying A.G. Edwards(AGE Quote - Cramer on AGE - Stock Picks) for $6.8 billion. The Amex Securities Broker Dealer Index rose 2.8% on the day.
RSS
