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Update: Major Indexes Higher After Strong Consumer Confidence Data

Chris Frankie

The consumer confidence index rose to a reading of 117 in March, a surprisingly high number that was well above the upwardly revised 109.2 in February.

Economists were expecting the index to come in at 104.5. Last month, the index had been 106.8 before the revision.

The major market indexes moved higher after the figures were released, with the Dow Jones Industrial Average gaining 129.55 points, or 1.3%, to 9817.08. The Nasdaq Composite rose 55 points, or 2.9%, to 1973.40, and the Standard & Poor's 500 index was up 17.34 points, or 1.5%, to 1170.03.

"It did bounce up a little higher than people expected," said Brian Belski, fundamental market strategist at U.S. Bancorp Piper Jaffray in Minneapolis. "I think it's healthy the way the market digested this news."

Belski said the data might be an indication that "the economy is not in as bad of shape as people thought it was. I think we're in the early stages of a solidification or recovery in the quarter." But he added that the true test will be how the market reacts to first-quarter corporate earnings.

In recent weeks, stocks have reacted poorly to strong economic data and rallied on weaker data, on the notion that the weaker the economy gets, the greater the possibility the Federal Reserve will provide additional relief by cutting interest rates even further.

The consumer confidence index has fallen sharply between August 2000 and February 2001, dropping 35 points, as people react to the slowing economy.