In the currency market, the dollar lost some ground against the euro. Late Tuesday, the euro was trading at $1.2868 vs. $1.2718 on Monday.

Despite the improved stock market sentiment, Tuesday’s economic data offered few signs that any U.S. upturn is in the offing. The Conference Board said consumer confidence plunged in February to a record low as concerns about jobs, income and the economy worsened considerably. The consumer confidence index fell to 25, well below the reading of 35 that economists surveyed by MarketWatch had been looking for, from a downwardly revised 37.4 for January.

Meanwhile, home prices in 20 major cities dropped 2.5% in December from the prior month and were down a record 18.5% from the final month of 2007, according to the Case-Shiller home price index published by Standard & Poor’s.

Also on Tuesday, Fed Chief Ben Bernanke told the Senate Banking Committee the economy is likely to keep shrinking in the first six months of this year after posting its worst slide in a quarter of a century at the end of 2008. Bernanke said he hoped the recession will end this year, but that there were significant risks to that forecast.

Big Ben conjectured that any economic turnaround will hinge on the success of the Fed and the Obama administration in getting credit and financial markets to operate more normally again. “Only if that is the case, in my view there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.

“To break that adverse feedback loop, it is essential that we continue to complement fiscal stimulus with strong government action to stabilize financial institutions and financial markets,” Bernanke said. This sounds nice, but it will likely exacerbate the problems in the long run.

Source: Buck Falls Against The Euro