Stocks Hold Gains Despite Consumer Data

Wall Street continues to trade with gains despite the release of some dismal economic data.
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Updated from 11:20 a.m. EST

Stocks in New York held to gains early Tuesday afternoon despite the release of the worst consumer confidence figures on record.

The

Dow Jones Industrial Average

was up 125 points at 8609, and the

S&P 500

was gaining 14 points at 883. The

Nasdaq

was up 28 points at 1538.

Adding juice to the market, the Treasury Department said it will provide $5 billion to

GMAC Financial Services

, GM's auto and mortgage financing arm, to keep it from filing for Chapter 11. In return for the capital infusion, the government will receive preferred shares that pay an 8% dividend and warrants to purchase additional shares. The Treasury will also extend up to $1 billion to GM, enabling the company to purchase additional equity as GMAC strives to raise more capital.

The

Federal Reserve

last week approved GMAC's application to become a bank holding company, a designation that would give the company access to government programs, including Troubled Assets Relief Program, or TARP.

Wall Street and Main Street are no doubt happy to say goodbye to a traumatic 2008, but consumers aren't signaling a change of heart. The Conference board said

consumer confidence

, based on a sample of 5,000 households, fell to a new all-time low in December, falling to 38 from 44.7 in November. "The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008," says Lynn Franco, director of the Conference Board Consumer Research Center.

The Conference Board said the so-called Present Situation index fell to 29.4 from 42.3 a month prior, and the Expectations Index decreased to 43.8 from 46.2 in November. "Both sub-indexes bear careful watching over the next several months to see if they are starting to show signs of approaching a bottom," says Franco. "In the meantime, however, the overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half."

Fallout from a lackluster holiday sales season continues to play out in the retail sector. The International Council of Shopping Centers said Tuesday that in the week ended Dec. 27, chain store sales fell -1.5% compared to a 2.6% gain the week prior. Meanwhile,

Parent Co.

(KIDS) - Get Report

, which operates etoys.com, is the latest victim to fall, filing for Chapter 11 bankruptcy protection this week.

The

Standard & Poor's/Case-Shiller

20-city housing index fell by a record 18% in October year over year, while the 10-city index fell 19.1%. The 20-city drop was the largest since its inception in 2000.

In other commodities, oil was recently down 92 cents at $39.63, after rising above

$40 a barrel

a day prior on the possibility that Israeli attacks in Gaza could lead to restrictions in regional supply. Gold was recently down $3.10 at $872.20 an ounce.

Longer-dated U.S. Treasury securities were recently mixed. The 10-year note was flat to yield 2.1%, and the 30-year was recently rising 18/32, yielding 2.6%. The dollar was weaker against the euro, and stronger against the pound and yen.

Overseas, European exchanges such as the FTSE in London and the DAX in Frankfurt were registering slight gains. In Asia, Japan's Nikkei ended higher while and Hong Kong's Hang Seng nudged lower.

Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP contributed to this report.