U.S. stock prices moved higher Tuesday on mixed economic data. Wall Street was focused, in particular, on U.S. consumers, and whether they will continue spending enough to fuel an economic recovery.
The Dow Jones Industrial Average rose 121 points, one percent, to 10,522. The broader Standard and Poor's 500 index was up six points, 0.5 percent. The tech-weighted NASDAQ composite also moved 0.5 percent higher.
Latest on the U.S. economy, personal income rose 0.3 percent in June. Spending went up 0.4 percent. Economist Stuart Hoffmann says both figures are good. "Consumers are saving a little bit," Mr. Hoffmann says. "Yes, they're borrowing money. But their income has been growing, and despite all the widespread lay-offs, they're willing to spend."
However, a new survey shows consumer confidence slipped in July. The numbers still were well above a four-and-a-half year low reached earlier this year, a sign analysts say that consumers may be optimistic enough to keep spending.
So, what is an investor to make of all these data? Some experts caution trends can change from month to month. Already, the U.S. central bank has warned it could take longer for the U.S. economy to turn around than previously estimated.
Analyst Marty Cunningham, chief trader for Schwab Capital Markets, says the trading environment on Wall Street is tough. "It's as difficult a market as I've seen in a while to be a trader," Mr. Cunningham says. "You've got much uncertainty around the economy, much uncertainty around where's the next real move the leg up, the leg down to test the lows. And when we get to a position where there is much volatility, little volume, it makes it very, very difficult to make some sort of firm decision about what to do going forward."
Meanwhile, on the corporate earnings front, many U.S. businesses do not see any fast pick-up in profits this year. Verizon, the largest local U.S. telephone company, lowered its earnings forecast.
And, cell-phone maker Motorola reaffirmed its earnings target for the year. But, bowing to economic uncertainty, the company was not able to give any insight for 2002.