Markets Quiet As Consumer, Manufacturer Sentiment Ebbs: Daily Markets Wrap

Consumers didn't get the escape velocity memo, the one that says their economic and financial affairs are getting better and better. A Thomson Reuters/Univ. of Michigan survey released Friday found consumer sentiment down, especially on expectations for the next six months.

The survey's expectations index fell to 68.9 from 70.3 last month, with consumers worried about inflation rising to 4 percent soon. Real customer spending has been flat for three months, as real disposable income is running at a 0.7 percent annual rate -- half the pace of a year ago, said David A. Rosenberg, chief economist of Gluskin Sheff + Assoc. Inc.

Manufacturers missed the memo, too. Earlier this week the outlook indexes of the manufacturing surveys produced by the New York and Philadelphia Fed banks fell again. The indexes in both banks' surveys have been falling since January.

Stocks. Equities were little changed. The S&P 500, which is off to its best start since 1998, rose slightly to close above 1,400 again. The Dow Jones Transportation Index edged up, but the Russell 2000 slipped.

Bonds: Bonds closed out their worst week in eight months, with yields on 10-year Treasurys rising to 2.3 percent. Labor Department data showing rising prices helped bonds pare losses.

Currencies. The dollar fell from its 11-month high against the yen and one-month peak against the euro on mild U.S. inflation data. The euro rose above $1.31. Mexico's and Chile's peso declined. India's rupee was up.

Commodities. Crude oil surged 2 percent, copper slipped and gold gave up a few dollars to stay below its 200-day moving average. Coffee and sugar fell, as did livestock, while corn, soybeans and wheat settled higher.