The Dow Jones industrial average rose 260.01 points to close at 9947.54, a 2.7 percent increase. The Nasdaq index climbed 53.77 points, or 2.8 percent, to 1972.26. That doesn't mean economists' concerns have evaporated. While consumer confidence can be an important factor in determining the short-term course of the economy, a higher level of confidence does not guarantee that spending won't fall. Nor does a single month's improved reading suggest that the Fed will not continue reducing short-term interest rates until there is solid evidence that the economy has resumed a more healthy growth rate.
Many troubling signs remain.
For example, in a second economic report out yesterday, the Commerce Department said that new orders for durable goods, such as cars, machinery and computers, fell 0.2 percent last month. But the confidence figures indicate that consumer spending, which accounts for about two-thirds of the nation's economic activity, is not about to take a nose dive. But this month, while their confidence about the current economy remained the same, their feelings about the future improved considerably. The overall confidence index jumped to 117 this month from 109.2 in February. Most analysts had thought falling stock prices would drive the index still lower.