A key indicator helps give stocks a lift

NEW YORK - After months of giving investors only headaches, consumers gave Wall Street a break yesterday.

A closely watched measure of consumer confidence soared in April, pulling stocks off an early slide.

Stocks ended with modest losses after fluctuating throughout the day. Worries that large banks might need more capital and the spread of swine flu were balanced by news that the Conference Board's Consumer Confidence Index surged this month to its highest level since November.

IBM Corp.'s decision to boost its dividend and spend more to buy back stock gave the market another shot of confidence, but an afternoon rally lost steam.

The Dow Jones industrial average slipped 8.05, or 0.1 percent, to 8,016.95 after being down as much as 86 ahead of the consumer confidence report. The Standard & Poor's 500 index fell 2.35, or 0.3 percent, to 855.16, and the Nasdaq composite index fell 5.60, or 0.3 percent, to 1,673.81.

Federal Reserve policymakers were meeting yesterday and today to weigh whether additional steps are needed to brace the economy as an outbreak of the swine flu has emerged as a potential new danger to the fragile economy.

Banking troubles returned to the spotlight after news that regulators told Bank of America Corp. and Citigroup Inc. that they may need to raise more capital unless they can convince regulators that results of government "stress tests" were mistaken.

Bank of America fell 77 cents, or 8.6 percent, to $8.15, while Citigroup fell 18 cents, or 5.9 percent, to $2.89.

Some stocks that depend on consumer spending rose after the Conference Board said its index jumped 12 points to 39.2 this month. The reading was far better than the 29.5 that economists had expected.

Starbucks Corp. rose 30 cents, or 2.3 percent, to $13.50, while Coca-Cola Co. advanced 4 cents to $42.28.

IBM rose $1.99, or 2 percent, to $101.94.

In other trading yesterday, the Russell 2000 index of smaller companies rose 3.31, or 0.7 percent, to 472.84.

The swine flu gave investors reason to cash in recent gains Monday, but the Dow is still up 22.5 percent from the nearly 12-year low it reached in early March.

Light, sweet crude fell 22 cents to $49.92 a barrel on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average fell 2.7 percent. In Europe, Britain's FTSE 100 fell 1.7 percent, Germany's DAX index fell 1.9 percent and France's CAC-40 fell 1.7 percent.