U.S. Stocks Trade Mixed after Two-Day-Rally

Wall Street moved back and forth Tuesday, after a two-day rally, as investors digested dismal economic data and the Federal Reserve committed as much as 800 billion U.S. dollars to boost lending.

Meanwhile, the U.S. Conference Board said its Consumer Confidence Index unexpectedly rose to 44.9 in November, up from a revised 38.8 in the previous month. But the reading still stayed at a low level.

The Federal Reserve took two new steps to unfreeze credit for homebuyers, consumers and small businesses, committing up to 800 billion dollars. The central bank will purchase as much as 600 billion dollars of debt issued or backed by government-chartered housing-finance companies.

It will also set up a 200-billion-dollar program to support consumer and small-business loans, the Fed said in statements in Washington.

The U.S. economy shrank in the third quarter faster than previously estimated as consumer spending plunged by the most in almost three decades. Gross domestic product contracted at a 0.5 percent annual pace from July through September, the most since the 2001 recession, according to revised figures from the Commerce Department. The government's advance estimate issued last month showed a 0.3 percent decline.

U.S. consumer confidence unexpectedly rose in November from a record low as falling gasoline prices helped alleviate concerns about rising unemployment and tumbling financial markets.

The Conference Board's index of consumer confidence climbed to 44.9, the second-lowest reading since 1974, from 38.8 the prior month. A separate report showed home prices continued to drop in September, further undermining consumer spending.

Moreover, the S&P/Case-Shiller home-price index dropped 17.4 percent in September, the biggest decline on record and worse than forecast.

The Dow Jones average rose 36.08, or 0.43 percent, to 8,479.47. The S&P 500 rose 5.58, or 0.66 percent, to 857.39. The Nasdaq composite index fell 7.29, or 0.50 percent, to 1,464.73.

Source: CRIEnglish