The Conference Board's Consumer Confidence Index fell sharply in September, dropping 16.4 points to 97.6, its lowest level since January 1996. Economists had forecast it to come in at 105.1. It was the steepest monthly drop in the index since October 1990.
Many economists had thought that the index would be skewed upward by a patriotic show of support for the economy. But the Conference Board said that "while survey results conducted before and after the terrorist attacks on September 11 differed slightly, there was no reversal in the downward trend of the Index."
Despite the drop in confidence, stocks held up well, continuing the rally that began yesterday. The Dow Jones Industrial Average was lately up 66 to 8669 while the S&P 500 was 1.1% higher. Regardless of what economists may have forecast the idea that American confidence has been shattered following the terrorist attacks two weeks ago appears priced into the market.