SHARES STRONGLY UP this week 29/12/04

Wall Street's back to its winning ways

Consumer confidence soars past forecasts; crude higher

NEW YORK (CBS.MW) -- U.S. stocks were back in rally mode Tuesday with all three of the major indexes marking fresh three-and-a-half year highs on news of a surge in consumer confidence to its best levels since July.

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"It's almost like there's a period right now where we've got a temporary reprieve from all the problems that were plaguing us around the time of the election," said Philip Dow, director of equity strategy at RBC Dain Rauscher. "People just aren't focusing much on the weak dollar or the deficits or other problems."

The Dow Jones Industrial Average ($INDU: news, chart, profile) closed at session highs, up 78.41 points, or 0.7 percent, at 10,854.54, while the Nasdaq Composite Index ($COMPQ: news, chart, profile) popped 22.97 points, or 1.1 percent, to 2,177.19 and the S&P 500 ($SPX: news, chart, profile) rose 8.62 points, or 0.7 percent, to 1,213.54.

For the Dow and Nasdaq, they were the highest closes since June 2001. For the S&P, the best close August 2001.

The gains came as the Conference Board said its consumer confidence index jumped to 102.3 in December from a revised 92.6 in November, far ahead of the 93.9 expected by Wall Street economists. The expectations index surged to 99.9 from 90.2, while the present situation index rose to 105.9 from 96.3. See Economic Report.

Because this is a market that's been ignoring negatives and focusing on positives such as the bullish confidence numbers, strategists expect the rally to continue considering that it's a seasonally strong time of the year for stocks.

"You don't fight City Hall and you don't fight momentum, so I think the market is going to work somewhat higher into the first to middle-part of January," said Al Goldman, chief market strategist at A.G. Edwards. He called Monday's decline "a very normal pause to refresh."

RBC's Dow, however, cautioned that markets may be a bit weaker as the new year gets under way.

"I think in general the psyche of the market is -- the propensity is-- to worry about things that maybe it shouldn't and I think we're going to get back to that early next year," Dow noted Until then, though, he said it seems nothing bad can happen.

"My sense is we're still in that kind of Never, Neverland of everything's kind of ok just for now," Dow said....