Ahead of the Bell: Consumer Confidence

The Conference Board, a private business research group, releases its monthly survey of consumer confidence at 10 a.m. EDT. The consensus estimate of Wall Street economists surveyed by Thomson/IFR is 56.5, slipping from May's 57.2 reading.

The survey, based on a representative sample of 5,000 U.S. households, measures consumer sentiment on current economic conditions and the spending outlook for the next six months. In 1985, the consumer confidence index stood at 100, according to the board. Fluctuations of 5 points or more in the index are considered significant.

Consumer confidence in May fell to its lowest level since October 1992 when the economy was coming out of a recession. It is likely to deteriorate further in June amid falling home prices, soaring energy costs, rising unemployment and a sell-off in the stock market, Michael Hanson, an analyst for Lehman Brothers, wrote in a note to clients. He expects the index to fall to 55.

Investors closely monitor the sentiment of consumers because their spending represents about 70 percent of U.S. gross domestic product. GDP measures the value of final goods and services produced.

Record high gasoline prices and food costs have continued to thwart most shoppers' urge to splurge at many of the nation's retailers.

Circuit City, the nation's second largest electronics retailer, last week reported its first-quarter loss widened due to a more than 11 percent drop in sales at established stores, while its bigger rival Best Buy reported a 7 percent drop in quarterly earnings.

While retailers saw some business pick up near Father's Day, Redbook analyst Catlin Levis said discounters like Wal-Mart Stores Inc. and Target Inc. still appeared to fare better in food and household goods, than fashion merchandise.