Good businesses will still attract investment. If most of their customers were dot-coms, maybe IT companies should look beyond the sector, he said. Meanwhile, a gauge of consumer confidence, the University of Michigan consumer sentiment index, rose in March, despite recent heavy stock market losses and job cuts. The index had declined the previous three months. The indicator corroborated the Conference Board's consumer confidence survey on Tuesday, which also rebounded and indicated that Americans expected the economy to improve over the next six months.
Confident consumers spend more and make long-term financial commitments, which fuel the economy.
In the prior week, the Federal Reserve cut a key interest rate one-half percentage point to 5.0 percent to spark economic activity. The Fed's recent rate cuts should keep the economy from entering a recession and will likely revive consumer demand, which should stimulate manufacturing and hiring later in the year, said Dave Huether, economist for the National Association of Manufacturers. A report from the Commerce Department showed Americans continued to earn and spend more in February than in January but at a slower rate. Personal income increased 0.4 percent in February after advancing 0.5 percent in January from December. Americans spent a modest 0.3 percent more in February, but that was on top of a 1-percent spending spree in January, the government said.