WASHINGTON, March 26 (UPI) -- Stock prices on the New York Stock Exchange and the Nasdaq Stock Market gained ground Tuesday, as a strong reading on consumer confidence bolstered hopes for a solid economic rebound.
The blue-chip Dow Jones industrial average rose 71.69 points, or 0.70 percent, to close at 10,353.36, having fallen 146.00 points Monday. The tech-heavy Nasdaq composite index increased by 11.68 points, or 0.64 percent, to 1,824.17, after dropping 38.90 points in the previous session.
The broader New York Stock Exchange composite index gained 3.25 points to 595.68, while the Standard & Poor's 500 index rose 6.62 points to close at 1,138.49. The American Stock Exchange composite index rose 5.14 points to 901.02, while the broad Wilshire 5000 Index rose 62.71 points, or 0.59 percent, to close at 10,686.02.
Big Board volume was at an estimated 1.20 billion shares, while Nasdaq volume was at 1.64 billion shares. Advancers beat decliners 19 to 12 on the NYSE, while gainers also outnumbered decliners 19 to 15 on Nasdaq.
The release of the strongest consumer confidence figure in a quarter-century earlier in the day buoyed market sentiment, and technology shares -- especially semiconductors -- as well as financials, land transportation equipment and home construction were especially strong.
The Conference Board's consumer confidence index jumped to 110.2 in March from an upward-revised 95.0 in February. The group's present situation index, a gauge of consumers' assessment of current economic conditions, also surged to 111.5 from 96.4 the prior month.
Consumer expectations for the state of economic activity over the next six months were also up strongly -- to 109.3 from 94.0 in February. Economists had expected consumer confidence to undergo a moderate increase in March, with most economists expecting the index to rise to 98.0.
"Consumer confidence has been bolstered by the improvement in business and labor market conditions," said Lynn Franco, director of the Conference Board's Consumer Research Center. "The latest gains are striking. The jump in the present situation index is the largest gain in 25 years, while the expectations index has not risen this sharply in nearly a decade."
Meanwhile, the Commerce Department said orders for big-ticket items rose more than expected in February, helped by large gains in the defense and aircraft industries, and adding to evidence that the manufacturing sector of the U.S. economy is rebounding.
Orders for durable goods, items meant to last three years or longer, rose by 1.5 percent to $179.40 billion in February after rising 1.3 percent in January, previously estimated as a 2.0 percent increase.
The February durable goods gain was larger than analysts' expectations of a 1.0 percent rise for the month. Tuesday's report adds to evidence that some sectors of the U.S. economy are snapping out of last year's economic recession, even if the gains have not yet reached all industries.
The Federal Reserve left interest rates alone at its last policy meeting and switched its risk assessment to neutral from an emphasis on possible future deterioration. Analysts widely expect the Fed to begin raising interest rates later this year, once the economy begins to pick up more steam.
The February durable goods report showed that last month's gain in durable goods orders was concentrated in the defense and aircraft industries. Orders soared for defense capital goods, up 78.6 percent, and aircraft, up 41.0 percent. And on the interest rate front, a top Federal Reserve policy maker hinted that the central bank is unlikely to raise interest rates quickly this year, saying inflation will not flare up "anytime soon," although the economy is primed for a recovery.
"The pre-conditions for recovery are in place," William McDonough, president of the Federal Reserve Bank of New York, told the National Association for Business Economics. Still, he said, "continued slack in the economy and the strong dollar should prevent inflation from rising anytime soon."
Meanwhile, U.S. Treasury prices rose. The 10-year bond gained 14/32 to 96 13/32. Its yield, which moves in the opposite direction of its price, slipped to 5.34 percent from 5.41 percent late Monday.
In Europe, stock prices were slightly lower in London, but rose in Frankfurt and Paris. The London International Stock Exchange's blue-chip FTSE-100 index slipped 8.10 points, or 0.16 percent, to 5,195.5. The German DAX index, meanwhile, rose 73.21 points, or 1.38 percent, to 5,390.59 and the French CAC-40 index rose 39.71 points, or 0.87 percent, to 4,628.07.
Earlier in Asia, prices on the Tokyo Stock Exchange ended slightly lower Tuesday after spending most of the session in positive territory, as thin trading activity left the market vulnerable to small-lot moves in the stock index futures market. Japan's blue-chip Nikkei Stock Average of 225 selective issues, which lost 83.99 points Monday, slipped another 53.17 points, or 0.5 percent, to 11,207.92 after topping the 11,500 level earlier in the session. The decline was the fourth in a row.
Analysts said the Nikkei hit a high of 11,524.23 in early trading on short-term buying of bank stocks after a Tokyo District Court ruling against the Tokyo metropolitan government's controversial five-year taxation plan solely targeting big banks.
Major technology shares also contributed to the sharp gain early after a report that electronics components orders are picking up slowly.
Analysts said the market came under selling pressure late in the session as investors moved to lock in profits in an otherwise low-volume session. Experts noted the Nikkei was weighed down around 42 points as many companies went ex-dividend before the end of the fiscal year on Friday.
Traders said until the fiscal year-end Friday big orders placed via foreign brokerages may dictate the direction of the market.
Elsewhere in Asia, prices on the Hong Kong Stock Exchange ended lower as investors opted for the sidelines to await corporate earnings results. The blue-chip Hang Seng Index lost 49.72 points, or 0.5 percent, to 10,786.92.
Trading was cautious ahead of earning results by major companies such as China Unicom and CNOOC.
Meanwhile, stocks rose to their highest level in 17 months on the Taiwan Stock Exchange. The Weighted Index rose 23.47 points, or 0.38 percent, to 6,242.64. Stocks also ended higher on the South Korean Stock Exchange. The benchmark Kospi composite index added 1.62 points, or 0.18 percent, to 881.03.
