US stocks rise after mixed economic news

John Santiago works on the floor of the New York Stock Exchange Friday, Aug. 12, 2011. (AP Photo/Richard Drew)
August 12, 2011 9:50:00 AM PDT
U.S. stocks are rising as mixed economic signals confound traders already dizzy from a week of record-setting gains and losses.

Just before noon, the Dow Jones industrial average is up 185 points, or 1.7 percent, at 11,328. The S&P 500 index is up 15, or 1.2 percent, at 1,187. The Nasdaq composite index is up 28, or 1.1 percent, at 2,520.

"If you look at the volatile moves this week for the average guy at home, there's no way you can trade them. And on the downs, let's say you wanted to get in the market, there was no way for you to pick a single stock and do better than the overall market," said Jeff Carter from PointsandFigures.com.

On Friday, the markets continued to swing as two consumer reports were released -- one on retail sales and the other on consumer sentiment.

The report on retail sales shows spending is up 0.5 percent this month -- that's the best showing since March. The report says consumers spent more on automobiles, gas and furniture.

"I'm spending money, but only if it's on sale," said consumer Joanne Schalk.

The report on national consumer confidence, however, doesn't bode well for the economy. The University of Michigan Consumer Confidence Index plunged in August to the lowest level since May 1980. It slumped to 54.9 from 63.7.

"Things are pretty scary, you know? People don't have the money. You don't know what tomorrow brings. So I'm not spending a whole lot. I'm very frugal with my spending habits lately because I just don't know what to expect," said consumer Pamela McKinney.

So how do these reports relate to the markets? Carter says there's maybe a slight bump or drop but not a major effect right now. The highs and lows of the stock market are mostly because of overall bad economy, the credit downgrade and the European debt crises.

"You're going to have a lot of volatility because it creates uncertainty, which creates fear, which creates people not wanting to take a lot of risk," Carter said.

Financial experts say the best thing to do is to ride this out and not to make any drastic changes to the average 401K. But for some that's easier said than done, especially for folks approaching retirement.

If shares close higher Friday, it will be the first time in more than a month that the market rose twice in a row.

The Associated Press contributed to this report.


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