Richard Drew, Associated Press
WASHINGTON — The mixed economic signals driving the stock market's record-setting swings this week keep coming. But on Friday, even a survey showing Americans are dismayed about the economy didn't stop the gains on Wall Street.
Conflicting reports on retail sales and consumer sentiment sent the Dow up, then down, then up again.By early afternoon, the Dow Jones industrial average was up 143 points. It rose more than 150 points early Friday after a government report consumers spent more on autos, furniture and gasoline in July, pushing up retail sales by the largest amount in four months. The Dow briefly turned negative after the release of a dismal survey on consumers' feelings about their personal finances and the economy.
The Reuters/University of Michgan survey of consumer sentiment fell to a 30-year low.
The retail sales data covered all of July, but financial markets didn't start their wild ride until July 22. The sentiment survey was taken over the past 10 days, as Americans watched the markets leap and dive on news about Europe's spreading financial crisis, the first-ever downgrade of the U.S.s long-term credit rating, signals that the job market improved slightly in July and strong earnings from a technology bellwether.
Normally, such a bad consumer survey would have pushed shares sharply lower for the day, said Quincy Krosby, an investment strategist with Prudential Financial.
"But these are not normal times," she said. Market volatility cuts both ways, sending shares way up or way down, Krosby noted. That can cause shares to defy economic data.
Markets worldwide gained on Friday despite a trade report Thursday that showed the economic slowdown might be a global phenomenon. France reported Friday that economic growth in the country slowed sharply in the second quarter. A ban on short-selling in several eurozone countries lifted bank shares across Europe and helped calm markets there.
In early-afternoon trading, the Dow gained 1.3 percent, to 11,286. The Standard & Poor's 500 index added 10 points, or 0.8 percent, to 1,182. The Nasdaq composite index gained 21 points, or .8 percent, to 2,513.
If shares close higher, it will be the first time in more than a month that the market has risen two days in a row. The Dow and the S&P last rose for two trading days on July 6 and 7.
At Thursday's close, the Dow had fallen more than 12 percent since July 21.
The strong retail sales added to other bits of more positive data about the economy. The government said last week that hiring picked up slightly in July after two dismal months, though employers still are adding jobs too slowly to significantly reduce unemployment. A Thursday report showed applications for unemployment benefits fell to a four-month low. Some analysts believe recently announced layoffs will cause that number to rise in the coming weeks.
A separate government report on Friday showed that businesses increased their stockpiles of everything from raw materials to retail products for the 18th month in a row.
Growing inventories are usually a sign of business confidence. But nervous consumers have held back recently; in June they cut their spending for the first time in nearly two years.If the market's gyrations spook consumers, people might spend even less just as retailers stock up for the crucial holiday season.
Investors are already dizzy from seesaw trading. Shares have swung by hundreds of points each day this week as traders react to news about the economy, Federal Reserve policy and the financial crisis in Europe.
The Dow Jones industrial average soared 423 points on Thursday. It had already fallen 634 points Monday, risen 429 Tuesday and fallen 519 Wednesday. Never before has the Dow had four 400-point swings in a row.