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Tuesday, 30 October, 2001, 15:46 GMT
US consumer confidence plunges
Wal Mart storefront
America's shops struggle to attract custom
Confidence among US consumers has fallen to its lowest level since February 1994, as Americans digest the economic fall-out from last month's terror attacks.

The October consumer confidence index - compiled by the Conference Board, a US research firm - slumped to 85.5 points from 97 points in September.

"The economic outlook is becoming increasingly pessimistic, with consumer sentiment continuing to fall," said Conference Board consumer analyst Lynn Franco.

The fall, which was more acute than expected, had an immediate effect on already-depressed markets.

Markets wobble

London's FTSE 100 share index, which had earlier clawed back some of its morning losses, fell back below the 5,000 mark.

And the Dow Jones Industrial Average, the main US share index, dropped more than 180 points to below 9,100.

October's plunge confirmed fears that the weak performance of the US retail sector could prove more than a short-lived phenomenon.

A string of US retailers have released dismal results in the past few days, and hopes of a pick-up in trade before the vital Christmas season are now fading.

Gloomier and gloomier

Analysts seized upon the fact that America's gloom is deepening, not lightening, as the 11 September attacks recede.

"It's an ominous kind of report," said Dana Johnson, managing director and head of research at Banc One Capital Markets in Chicago.

"Obviously people are feeling worse and worse about their economic prospects in reaction to a lot of layoffs as well as to ongoing terrorist threats."

"The key going forward from here is what happens in the job market," said Tim O'Neill, chief economist at Bank of Montreal/Harris Bank.

The BBC's Patrick O'Connell in New York
"The US consumer is being tugged in two directions"

Terror's impact

Signs of a slowdown

Rate cuts


Key players

See also:

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