Consumer companies rose as traders bet consumer spending and home sales would rebound from a late 2023 slump.

Consumer sentiment leapt 13% in the first half of January from December, the University of Michigan said, as mortgage rates dropped and inflation fears subsided.

The reading completed the strongest two-month recovery in the sentiment index since 1991. Strategists at brokerage Jefferies said a brief dip in spending by middle-income consumers has been more than offset by increased spending from wealthier Americans, who are less susceptible to inflation in staples and energy.

"We had thought that consumer spending was going to decelerate sharply during the holiday season after consumers overextended themselves over the summer," said the Jefferies strategists. "However, the "pullback", if you could even call it that, was limited to the month of October!"

One realtor who specializes in selling beach homes in Florida said he has seen as many purchase inquiries in the first three weeks of 2024 as he fielded in the last three months of 2023.

Used-home sales slid 19% in 2023 from the prior year to 4.09 million, the lowest full-year level since 1995, the National Association of Realtors said.

Spirit Airlines rallied after the discount carrier said it was refinancing $1.1 billion in debt, alleviating some of the financial pressure created by the collapse of its merger with rival JetBlue.


Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

01-19-24 1733ET