Mar 25 - Summary: A jump in consumer confidence to a six-year high helps Wall Street stop losing streak; new home sales fall again but old home prices rise; IRS says bitcoin should be taxed as property. Conway G. Gittens reports.
A bump up in consumer confidence led to a bump up in investor confidence. The Dow and S&P 500 rallied and the Nasdaq did the same after it struggled for most of the session. Consumers are feeling much better-than-expected this month with the Conference Board index jumping to a post Great Recession high. Consumers are betting the economy will improve as the weather improves. The optimism, however, is tempered by paychecks that are not expected to get much fatter. Something else that might hold back consumers down the road: housing. Sales of new homes tumbled to a five-month low in February as the industry grapples with the weather. Higher interest rates and tight inventory are also negative factors. But on the other hand, prices continue to climb. As of January, re-sale prices in 20 big cities saw a year-over-year gain of more than 13 percent, according to the S&P-Case/Shiller Index. Despite the winter chill, Cumberland Advisors' David Kotok is a believer in the economy and a steady stock market gain of mid-to-high single digits. SOUNDBITE: DAVID KOTOK, CHIEF INVESTMENT OFFICER, CUMBERLAND ADVISORS (ENGLISH) SAYING: "If you really put a perspective on where we are, say the market's fairly priced - it isn't cheap but it isn't richly priced, inflation is around one or two percent. It's going to stay low for a while. Interest rates low for a while. It's a pretty good path." What is bitcoin? While some people are still trying to figure out - America's tax collector has an answer. For tax purposes: The IRS says the digital crypto-currency will be treated as property and will be taxed accordingly. Google Glass is getting another powerful partner. Luxottica, the world's largest eyewear manufacturer, will design, develop and distribute Google Glass for the masses. No word yet if Glass will lose that $1,500 price tag. A quick look at a few Brazilian shares traded here in the U.S. Standard and Poor's downgraded the country's debt rating to one notch above junk status but PetroBras, Banco Bradesco, Itau Unibanco and Vale all rallied. Finally, shares in Europe jumped on hopes a new round of economic stimulus is coming from the European Central Bank.