NEW YORK — Consumers are more willing to spend, and that’s making investors more optimistic about the economy.
The Dow Jones industrial average rose 46 points Monday and broader indexes also climbed after the Commerce Department said consumer spending rose for the fifth straight month in February.
The 0.3 percent gain was in line with economists’ expectations and raised hopes that the biggest driver of the economy is continuing to rebound.
Job creation and solid consumer spending are considered crucial to a sustained recovery. At the end of the week, investors will get the Labor Department’s monthly employment report. Analysts predict that employers added jobs in March for only the second time since the recession began in December 2007.
Meanwhile, easing concern about debt problems in Greece reduced demand for the safety of the dollar. The dollar’s drop in turn lifted demand for commodities, which become more attractive to foreign investors when the dollar falls because most of them are priced in dollars. Energy and materials stocks, including Exxon Mobil Corp. and Alcoa Inc., rose.
The debt-strapped Greek government raised $6.74 billion Monday by issuing seven- year bonds. The country’s ability to borrow is an important sign of confidence after European leaders and the International Monetary Fund last week agreed to provide a financial safety net for Greece and other countries that use the euro if they couldn’t issue debt.
Financial shares were mixed after the Treasury Department said it would start to sell the shares it owns in Citigroup Inc.
The Dow rose 45.50, or 0.4 percent, to 10,895.86. The index is at its highest level since September 2008.
The broader Standard & Poor’s 500 index rose 6.63, or 0.6 percent, to 1,173.22, and the Nasdaq composite index rose 9.23, or 0.4 percent, to 2,404.36.
The Dow is up 987 points, or 10 percent, since its lowest close of the year Feb. 8. Some analysts say the steady pace of the advance is a sign the market isn’t getting ahead of itself by bursting higher.
Related news
Consumer spending up again
WASHINGTON — Confidence is growing that the economic recovery won’t fizzle out. Consumers kept cash registers humming last month at a decent pace, pointing to modest and steady economic gains ahead.
The Commerce Department reported Monday that consumers boosted their spending by 0.3 percent in February, marking the fifth straight monthly gain.
Nigel Gault, chief U.S. economist at IHS Global Insight, called it “an encouraging sign of consumer revival.” The pickup in spending was a tad slower than the 0.4 percent increase registered in January and marked the smallest increase since September. Nonetheless, the spending gain was considered decent, especially given the snowstorms that slammed the East Coast and kept some people away from shopping.
“Households are starting to ease up on their tight grip on their wallets, though it would be nice if they had more money to spend,” observed Joel Naroff, president of Naroff Economic Advisors.
Incomes were stagnant in February, as the bad weather forced employers to trim workers’ hours. The Associated Press
