NEW YORK — After months of giving investors only headaches, consumers gave Wall Street a break Tuesday.
A closely watched measure of consumer confidence soared in April, pulling stocks off an early slide as investors grew hopeful that a better outlook among spenders would translate into bigger cash-register receipts.
Stocks ended with modest losses after fluctuating throughout the day. Worries about large banks’ possible need for more capital and the spread of swine flu were balanced by news that the Conference Board’s Consumer Confidence Index surged this month to its highest level since November.
IBM Corp.’s decision to boost its dividend and spend more to buy back stock gave the market another shot of confidence, but an afternoon rally petered out in the last hour to leave major market indicators barely in the red.
The Dow Jones industrial average slipped 8.05, or 0.1 percent, to 8,016.95 after being down as much as 86 ahead of the consumer-confidence report.
Broader stock indicators also lost ground. The Standard & Poor’s 500 index fell 2.35, or 0.3 percent, to 866.16, and the Nasdaq composite index fell 5.60, or 0.3 percent, to 1,673.81.
Consumers worried about falling home prices, rising unemployment and a slumping stock market have been reluctant to spend since troubles with the economy intensified last fall.
Since March, some reports on home sales and demand at factories have indicated the economy is starting to stabilize, helping to send stocks up more than 20 percent and build confidence among investors and consumers alike.
Todd Leone, managing director of equity trading at Cowen & Co., said investors have been growing more upbeat about prospects for the economy. That optimism followed a string of better-than-expected readings and has driven a market rally since early March.
“People aren’t as afraid as they have been. We’re definitely seeing more money come back into the market,” he said.
The report on consumer confidence bolstered hopes that some consumers might begin to step up their spending.
Some stocks that depend on consumer spending rose after the Conference Board said its index jumped 12 points to 39.2 this month.
The reading was far better than the 29.5 that economists had expected and suggests consumers might be willing to spend more if confidence continues to build.
