Consumer Confidence Hits 2-Year High

Consumer confidence posts its third straight gain in May, hitting a level not seen since March of 2008.
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NEW YORK (

TheStreet

) -- Consumer confidence hit a two-year high in May, the third consecutive increase.

The Conference Board said on Tuesday that its consumer confidence index hit 63.3 during the month from 57.7 in April. This is the highest level since March 2008. Economists expected a reading of 59.

Consumers' outlook for the next six months surged to 85.3 from 77.4, its highest reading since August 2007.

Still, this didn't do much to mitigate investors fears, as the Dow saw a massive sell-off this morning, opening more than 200 points lower this morning. And it won't be until the Conference Board's index hits over 90 that we will know the economy is actually steadying.

The S&P Retail Index is falling 0.8% to 430.99, on euro-zone fears and a muted retail outlook for the second half of the year.

The International Council of Shopping Centers cuts its May forecast on Tuesday, now expecting chain store sales to increase between 2% and 2.5% from prior outlook of 3.5%.

Sales for the week ended May 22 rose 1.3%, its smallest year-over-year gain in over two months.

While most retailers reported steady improvements in the first quarter, outlooks disappointed Wall Street. Retail giant

Wal-Mart

(WMT) - Get Report

, for one, issued guidance that fell short of outlooks, as traffic and same-store sales continue to decline.

Shares of Wal-Mart are dropping 1.4% to $50.30 in later morning trading.

Rival

Target

(TGT) - Get Report

said its May sales were slowing, even as it saw an uptick in discretionary purchases during the first quarter.

Some of the morning's biggest decliners include

Borders

(BGP)

, which is dropping 6.6% to $2.14,

Blockbuster

(BBI) - Get Report

, which is off 5.2% to 35 cents,

Crocs

(CROX) - Get Report

, which is losing 4.7% to $8.84 and

Zale

(ZLC)

, which is tumbling 9.7% to $2.51.

-- Reported by Jeanine Poggi in New York.

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