U.S. retail stocks established a new high Tuesday and the Dow Jones Industrial Average closed above 13,000 for the first time since 2008 — a psychological victory aided by a better-than-expected reading on consumer confidence.
The Conference Board’s Consumer Confidence Index rose to 70.8 for February from 61.5 a month earlier, far higher than economists’ consensus estimate of 63. Both components of the Index saw gains, with the present situation portion rising to 45 from 38.8 and the expectations side up to 88 from 76.7.
Sentiment is at its highest level since last February, when the index hit 72.
“So far, rising gasoline prices have not sapped consumer confidence,” said Maury Harris, economist at UBS. “While the related hit to real incomes from rising gasoline is undeniable, apparently, to date, perceptions of a better job market have been more important for consumers than higher gasoline prices.”
A gallon of regular gasoline averaged $3.72 Tuesday, up from $3.42 a month ago, but still well below the July 2008 high of $4.11, according to AAA.
Of the consumers surveyed for the consumer sentiment report, those who said jobs are “plentiful” increased to 6.6 percent from 6.2 percent, while those anticipating more jobs ahead rose to 18.7 percent from 16.4 percent. And the proportion of consumers expecting an increase in their incomes improved to 15.4 percent from 13.8 percent.
Investors have been betting that the outlook is brightening.
The Dow — which pierced the 13,000 mark during the six prior trading sessions, but slipped back down each time — closed up 23.61 points to 13,005.12. The S&P Retail Index increased 1.7 percent, or 9.81 points, to 584.03, setting an all-time high of 584.45 in midday trading. The sector was supported by strong gains by Office Depot Inc. and the index easily passed its previous peak of 577.59, set last week.
Among the gainers were Aéropostale Inc., up 5.3 percent to $18.46; Joe’s Jeans Inc., 4.5 percent to 70 cents; The Talbots Inc., 3 percent to $3.14; Vera Bradley Inc., 2.8 percent to $36.72; American Eagle Outfitters Inc., 2.8 percent to $14.65, and Gap Inc., 2.8 percent to $23.71.