Consumers, Wall Street disagree on economy

Confidence waning in households even as earnings help boost
stock market

By ANNE D'INNOCENZIO

July 27, 2010, msnbc.com

http://www.msnbc.msn.com/id/38428573/ns/business-stocks_and_economy/
   
WASHINGTON - The disconnect between Wall Street and Main
Street is growing.

Americans' confidence in the economy faded further in July,
according to a monthly survey released Tuesday, amid job
worries and skimpy wage growth. That's at odds with Wall
Street's recent rally fueled by upbeat earnings reports from
big businesses such as chemical maker DuPont Co. and
equipment maker Caterpillar Inc. That's because the pumped-up
profits are being fueled by cost cuts like layoffs and
overseas sales. In fact, big companies have shown few signs
they're ready to hire.

The Consumer Confidence Index came in at 50.4 in July, a
steeper-than-expected decline from the revised 54.3 in June,
according to a survey the Conference Board. The decline
follows last month's decline of nearly 10 points, from 62.7
in May, and is the lowest point since February. It takes a
reading of 90 to indicate a healthy economy - a level not
seen since the recession began in December 2007.

"Consumers have a much different view of the economy than the
stock market does, and their views matter more to the
economy," said Mark Vitner, an economist at Wells Fargo. The
index "tells me the economy is heading for slower growth in
the second half. We have low expectations for back-to-
school."

To read more, go to http://www.msnbc.msn.com/id/38428573/ns/business-stocks_and_economy/

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