Rise in Personal Spending Spurs Trading
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Wall Street headed for a higher opening today after government data indicated that Americans are still spending, albeit at a slow pace.
The Commerce Department said personal spending rose by 0.2% last month, and personal income rose by 0.2%. The department also said inflation at the personal spending level, after stripping out food and energy costs, ticked up in April by a tame 0.1%.
All three readings were in line with the market’s expectations, and alleviated some concerns about high commodities costs causing a sharp pullback in spending, or lifting prices for other goods.
Meanwhile, investors got some good news late yesterday when Dell, the world’s second-largest seller of personal computers, issued a profit report that was stronger than analysts expected due to growth in Asia and robust sales of notebook computers.
Dell shares jumped about 10% in premarket trading, and injected some optimism into Wall Street that foreign economies are helping many companies weather the weak American market.
Wall Street’s concerns about the economy and inflation are far from erased, however; Americans still face rising costs for necessities such as groceries and gasoline, and crude oil remains near record highs.
The Dow Jones industrial average rose 44 points, or 0.35%, to 12,668. Standard & Poor’s 500 index futures rose 4.50, or 0.32%, to 1,402.30. Nasdaq 100 index futures rose 11.00, or 0.54%, to 2,034.00.
The stock market yesterday advanced for the third consecutive day thanks to a drop in oil prices and an upwardly revised estimate of first-quarter gross domestic product. Oil’s $4-a-barrel tumble camed amid concerns of waning demand and an Energy Department report saying crude supplies fell last week due primarily to tanker delays.
Today, though, oil was climbing again. Light, sweet crude oil futures rose $1.07 to $127.69 in premarket electronic trading on the New York Mercantile Exchange.
The dollar rose against other major currencies, while gold prices fell.
In other economic data, the Chicago Purchasing Managers’ index, which measures Midwestern business activity, is scheduled for release at 9:45 a.m. EDT, and the University of Michigan’s consumer sentiment index for May will arrive at 10 a.m. EDT.
Overseas, Japan’s Nikkei stock average closed up 1.52%. In afternoon trading, Britain’s FTSE 100 rose 0.41%, Germany’s DAX index advanced 0.56%, and France’s CAC-40 rose 0.56%.
