Charles Plosser said the Federal Reserve’s efforts to boost the economicrecovery by buying bonds was not likely to succeed. “The slow pace ofthe recovery should not be taken as evidence that the stance of monetarypolicy is inappropriate or that ever more aggressive accommodation canspeed up that pace,” he said.
Prior to Plosser’s speech inPhiladelphia, retail stocks were rallying on word that consumerconfidence rose to its highest level in seven months. The S&P RetailIndex rose as much as 1 percent before closing down 0.7 percent, or4.80 points, to 653.38. The Dow Jones Industrial Average fell 0.8percent, or 101.37 points, to 13,457.55.
Among the declinerswere Oxford Industries Inc., down 4.7 percent to $56.07; Fossil Inc.,3.4 percent to $84.89; Guess Inc., 3.3 percent to $24.99, and UnderArmour Inc., 3.2 percent to $54.62.
Shoppers, at least, are feeling better.
TheConference Board’s Consumer Confidence Index was up 9 points to 70.3this month, the highest level since February and much better than the1.7-point increase economists expected.
Lynn Franco, director ofeconomic indicators at The Conference Board, said, “Consumers were morepositive in their assessment of current conditions, in particular thejob market, and considerably more optimistic about the short-termoutlook for business conditions, employment and their financialsituation. Despite continuing economic uncertainty, consumers areslightly more optimistic than they have been in several months.”
Ofthe people who took the research firm’s survey, 18.2 percent said theyexpected business conditions to improve over the next six months, upfrom 16.7 percent, and 18.5 percent said they expect more jobs in themonths ahead, up from 15.8 percent.
“The summer doldrums havebeen reversed, and there is a considerably more upbeat view of jobprospects,” said Chris Christopher, U.S. economist at IHS GlobalInsight. “Back-to-school retail sales have not been very promising, andthis bounce in consumer mood — if maintained — may assist in boostingholiday retail sales.”
In Europe, stocks closed higher as MarioDraghi, president of the European Central Bank, called on governments touse “fundamental” measures help resolve the debt crisis.
“Weexpect the economy to return to growth next year.… Governments must actto ensure this immediate upturn strengthens rather than weakens,” saidDraghi.
The FTSE 100 in London increased 0.4 percent to5,859.71, as the CAC 40 in Paris rose 0.5 percent to 3,513.81, the DAXin Frankfurt climbed 0.2 percent to 7,425.11, and the FTSE MIB in Milanadvanced 0.4 percent to 15,932.60.
Among the retail and luxurystocks that gained the most ground were Safilo, up 5.9 percent to 6.18euros, and Inditex, 2.2 percent to 99.70 percent.
Postingdeclines for the day were Aeffe, which fell 6.1 percent to 0.63 euros;Burberry, 1.1 percent to 10.18 pounds, and Ferragamo, 1.4 percent to16.58 euros.
The pound traded at $1.62 against the dollar, while the euro traded at $1.29.