Blue-chip stocks were broadly higher today after a bevy of economic news lifted the spirits of analysts, investors, and traders. At close, the Dow Jones Industrial Average is up by 106 points, or 0.69%.
Stocks were primed to advance well before the markets opened for trading this morning. Yesterday, a member of the European Central Bank's executive board affirmed that the bank would continue with its accommodative monetary stance for as long as necessary. These comments were seconded today by a member of the Bank of Japan's board, who emphasized that it was vital for the East Asian country to keep interest rates both low and stable.
The news from both banks was met with particular relief this week after last week's comments by the U.S. Federal Reserve were interpreted to mean that it may soon reduce its monthly bond purchases, which have fueled equity gains. To read more about this, click here.
Beyond central banks, investors were also upbeat after learning about the improving mind-set of the American consumer. The Conference Board released the results of its most recent consumer sentiment survey today, showing that American's are more confident than they've been about the economy since 2008. The index climbed to 76.2 this month from a reading of 69 last month. The average economist surveyed by MarketWatch had predicted a reading of 72.3.
According to the board's director of economic indicators, "Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike, and sequester." Suffice it to say, this was great news. It's worth noting, moreover, that it adds further credibility to the ongoing improvement in the housing market . (Click here to read about the most recent data on housing prices.)
In terms of individual stocks, Microsoft was the top performer on the Dow today, up by 2.2% at close. My colleague Travis Hoium attributed the move to a recent report from industry analyst IDC predicting that PC sales will drop by 7.8% this year. While this sounds bad, the good news was that IDC expects the trend to bottom out and then begin to grow again by no later than 2017.
Alternatively, the worst-performing stock on the blue-chip index was AT&T , which finished the day off by 1.6%. The media is generally attributing this lackluster performance to an emerging threat from Google's ambitious push to build fiber networks in certain cities. According to a MarketWatch headline, "Google Fiber could turn cable, phone giants into boiled frogs, analyst says." The article cites Bernstein analyst Carlos Kirjner, "We think the impact of Google Fiber on incumbent cable and phone companies will be limited in the near-to-medium term, in large part because it takes time to deploy networks. Despite this limited short-term impact, Google plays a very long game."
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The article Stocks Take Flight on Back of Consumer Confidence originally appeared on Fool.com.
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