U.S. stocks and exchange traded funds (ETFs) opened the month in the red despite news that consumer confidence is on the rise.
The Reuters/University of Michigan Surveys of Consumers said its final index of consumer confidence climbed to 65.1 in April from 57.3 in March, posting the biggest one-month increase since October 2006 and pushing the number to its highest level since September 2008, reports the Associated Press. To add icing to the cake, the index of current economic conditions rose to 68.3 from 63.3 in March, the best reading in the past four months and the index of consumer expectations jumped to 63.1 from 53.5, also the highest since September 2008.
Some more news good news for the economy came from the manufacturing industry. Although indicators are still showing signs of contraction, the manufacturing index put out by the Institute of Supply Chain rose to 40.1 from 36.3 in March, states Ben Rooney of CNN Money. This increase was driven by an increase in new orders, which jumped six points.
These indicators still don’t mean that our economy is in the clear. Unemployment is still at 8.5%, economic contraction is still prevalent and many consumers still fear that no immediate economic recovery is in the offing. Additionally, orders to U.S. factories fell more-than-expected by 0.9% in March and factory shipments dropped for an eighth consecutive month and a weakness in non-durable goods reflected declines in demand textile goods, clothing, paper and chemicals.
Chrysler LLC heads to bankruptcy court today to determine the fate of the creditors that hold nearly $6.9 billion of Chrysler’s debt and get rulings on how to proceed with its bankruptcy filing from a federal judge. The good news is that Chrysler will not be going out of business, they will be restructuring, and hopefully in a speedy manner enabling employees to keep their jobs, states Micheline Maynard of the New York Times.
On the earnings note, Chevron (CVX) reported that first quarter profits dropped by 64% due to lower crude oil prices and the overall weakness of the global economy. The oil giant reported earnings of $0.92/share, which includes gains of $0.20/share from sales of assets, beating analyst expectations of $0.81/share, which typically exclude one-time items. United States Oil (USO), jumped nearly 4% in intraday trading on this news despite being down close to 14% for the year.
The nation’s largest life insurer, MetLife (MET), missed its earnings expectations by nearly 40%, reporting first-quarter earnings of $0.20/share. Additionally, Mastercard (MA) reported a drop in earnings of 18%, but was still able to beat Wall Street’s expectations. The credit card and global payments processor reported earnings of $2.80/share as compared to the $2.61/share forecasted by analysts.
To wrap it up, some experts believe that things will be a lot sunnier for the U.S. economy in the second half of the year. With consumer spending stabilizing, the Obama administration’s $787 billion stimulus package taking affect, the Federal Reserve’s efforts to unfreeze the credit markets and a drawdown in inventories conditions are falling into place for the U.S. economy to begin growing once again, states Matthew Benjamin of Bloomberg.
Despite opening on a sour note, U.S. markets were able to climb into positive territory in mid-morning trading. The Dow Jones industrial Average was up 0.2%, the S&P 500 climbed 0.3% and the Nasdaq jumped 0.1%.
Kevin Grewal contributed to this article.