Wells Fargo says investor mood getting gloomier

By Joseph A. Giannone

NEW YORK (Reuters) – U.S. investors grew gloomier about their financial outlook in recent months, citing rising energy prices, high unemployment and worries about the soaring federal budget deficit.

The latest Wells Fargo/Gallup “Investor and Retirement Optimism” index fell by 9 points to 33 between February and May. By comparison, the index peaked at 155 points in 2000, and hit 95 just before the credit crunch started to drag down financial markets in 2007.

The survey also for the first time split responses from working and retired investors and found Americans who are still saving for retirement — with an average age of 45 years — are gloomier than the generation in retirement.

“The major slide in sentiment (was) concentrated among working Americans who continue to face the pressure of supporting day-to-day expenses in the midst of trying to plan for their future,” David Carroll, head of wealth management, brokerage and retirement services at Wells Fargo & Co, said in a statement Thursday.

Helping explain the difference is that more retirees count on Social Security, a system in danger of insolvency in the years head, and employer-provided pensions to help fund their retirement.

People who are still working also worry that healthcare costs, inflation and energy prices will have a major impact on when they can retirement.

More than a third of workers surveyed said they intend to boost savings, though half will save the same amounts.

Wells, which owns the No. 3 U.S. brokerage business, said respondents to the quarterly survey who viewed “now” as a good time to invest in the financial markets fell to 53 percent in May from 62 percent in February.

Pessimism was on the rise even as the S&P 500 Index of large U.S. companies rose more than 8 percent this year through May 2, when Wells/Gallup began calling about 1,100 investors. (Reporting by Joseph A. Giannone, editing by Dave Zimmerman)