INSTANT VIEW: U.S. consumers' mood sours in Feb

NEW YORK (Reuters) - U.S. consumers' confidence fell to its lowest in three months in February as sentiment grew increasingly gloomy over an economic downturn that most expected to last five more years, a survey showed on Friday.

KEY POINTS: * The Reuters/University of Michigan Surveys of Consumers said its index reading of confidence for February tumbled to 56.2 from 61.2 in January. * That was the lowest since November, when U.S. stocks hit 11-year lows during one of the worst periods of the current financial crisis. A separate reading in the report showed consumer expectations fell to their lowest since May 1980. * "Confidence fell in early February as consumers came to the consensus that the economy would remain in recession throughout 2009," the report said.

COMMENTS:

CARY LEAHEY, ECONOMIST, DECISION ECONOMICS, NEW YORK:

"The index was disappointing, reversing all the gains of the past two months. Sentiment is back to where it was in November. Notable in the details was an extraordinary drop in the 12-month outlook which dropped from 47 to 27. There was also a big drop in price expectations from 2.2 percent to 1.6 percent which is a little bit of a surprise given that gas prices are back up. But people understand that the prices of things that they buy generally are falling."

JOSEPH TREVISANI, CHIEF MARKET ANALYST, FX SOLUTIONS, SADDLE RIVER, NEW JERSEY:

"What we have is a serious case of depressed stability. The number is slightly higher than the November reading which was the low of the last two years, but it is in no sense a recovery. There has not been much reaction in the dollar, just a slight uptick. The dollar is still benefiting from a flight to quality."

MARKET REACTION: STOCKS: U.S. equity indexes initially add to losses. BONDS: U.S. Treasury debt prices pare losses. DOLLAR: U.S. dollar holds gains.