Consumer Confidence Plunges in October

Consumer confidence fell to 85.5 in October from 97 the month before, the lowest level in more than seven years, according to the New York-based Conference Board.

The board said that the Sept. 11 terrorist attacks sapped consumers' optimism about job security and the U.S. economy, and pushed its index down for the fourth straight month. Analysts were expecting a reading of 96, the Associated Press reported.

Nearly two-thirds of economic activity stems from consumer spending, so as their confidence drops, spending does as well. And a drop in spending could create lower demand for trucking services to deliver new factory goods to stores.

Founded in 1916, the Conference Board is a private business membership and re-search network that also produces the U.S. Index of Leading Economic Indicators. Its membership includes more than 3,000 companies and other organizations in 67 countries.

The present situation index, which measures consumer views of the economy right now, sharply to 107.6 from 125.4 in September. The expectations index, which gauges consumers' outlook for the next six months, dived to 70.8 in October from 78.1.

The weak report sent stocks sharply lower Tuesday for a second straight session, news services reported. The Dow Jones industrial average closed down 147.52, or 1.6% percent, at 9,121.98, according to preliminary calculations. It was the index's worst finish in three weeks.

The Standard & Poor's 500 index was off 18.51, at 1,059.79, and the Nasdaq com-posite index lost 32.11, to close at 1,667.41.

Two other economic reports due out later this week will also be closely watched. Preliminary third-quarter gross domestic product, due out Wednesday, is expected to show negative growth. If GDP in the fourth quarter shows negative growth, it would meet the traditional definition of a recession.

Meanwhile, on Friday, the Labor Department releases its October employment as-sessment.

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