Financial Market Update: After the Closing Bell-Tues., Oct. 28

The whipsawing stock market took a wild swing upward today, with the Dow Jones gaining 889 points–its second-biggest one-day jump ever–as the Federal Reserve began a two-day meeting, during which it is expected to cut interest rates. The Standard & Poor’s 500 index gained 91.6 points, also its second-biggest one-day point gain ever.While the stock market soared, it was not all good news for the economy today. U.S. consumer confidence is down, says the Conference Board. Down to a record low of 38 this month, following the largest one-month decline (from 61.4 in September) since the organization devised the index back in 1967. This is hardly a surprise, considering the ingredients boiling in the nation’s–the world’s–economic stew: falling home prices, bad job prospects, dysfunctional banks, equity markets in freefall, even some lingering inflation, though gas is conspicuously cheaper for now. The Wall Street Journal reports that the previous record lows for consumer confidence also came, coincidentally, in election years: 1980 and 1992. This time, there’s no incumbent to toss out of the White House, but no one thinks this year’s low confidence bodes well for the Republican Party’s chances to retain occupancy of 1600 Pennsylvania Ave. In the bubble-pop department this morning, data for the August S&P/Case-Shiller Home Price Indices, a measure of U.S. housing prices, show that prices are down on an annual basis for the month just about everywhere. Some markets, however, have taken a worse thumping than others. For example, the index for greater Los Angeles shows prices down a whopping 26.7 percent, compared with August 2007. Las Vegas and Phoenix both turned in 30-plus percent declines, with Vegas at 30.6 percent and Phoenix at 30.7 percent. San Diego and San Francisco were down 25.8 percent and 27.3 percent, respectively. The lesson here, perhaps, is the bigger the bubble, the harder it pops. Compared to those numbers, places such as greater New York (down 6.9 percent vs. last year) and metro Chicago (down 9.8 percent) don’t look so bad. A handful of places, in fact, look positively cheery: Dallas, down a mere 2.7 percent, and Charlotte, N.C, down 2.8 percent. Of course, these are August numbers. That is, pre-Panic numbers–and further declines are expect in future months.