NEW YORK -- U.S. consumers are spending more and saving less because they feel wealthier thanks to a stock market rally that sent the Dow Jones industrial average to a record high this week, a survey released Friday showed.
In addition, a majority of stock owners think the current bull market will continue for the coming 12 months, a report by the Reuters/University of Michigan Surveys of Consumers said.
"Most of the spending gains have been among higher income households, who reported in April that the positive impact of rising stock prices was offset by concerns about falling home prices," said Richard Curtin, director of consumer surveys at the University of Michigan.
"How the tradeoff between rising stock prices and falling home prices is assessed is a critical issue for the May survey," he said.
Story Continues Below
In the data gathered between January and April, two-thirds of all households owned stock, with the typical stock owner's portfolio amounting to $71,913, the report said.
The dollar amounts held in stock were divided into about four equal groups, with the lowest holding under $20,000 and the top holding more than $200,000 in stocks.
As expected, nearly half of those in the lowest fifth of the income distribution had stock holdings under $20,000, while half of those in the top fifth of the income distribution had holdings of more than $200,000.
Stock owners were asked what they thought was the probability of a mutual fund with a diversified stock portfolio would increase in value during the next 12 months.
The probability of a gain was assessed at 57.7 percent across all stock owners, and rose across income groups, rising from 41.1 percent in the lowest fifth to 65.3 percent in the highest fifth of the income distribution.
© Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.
Editor's note:
These 3 Stocks Will Be The Biggest Winners When 77 Million Baby Boomers Retire
Buffett, Soros, Templeton, Rogers: Learn Their Money-Making Secrets
The 3 Best Income Stocks in the World
