INSTANT VIEW: Mood of consumers sours more in April

NEW YORK (Reuters) - U.S. consumer confidence fell for a third straight month in April, hitting its weakest in more than a quarter century on heightened worries over inflation and the sagging housing market, a survey showed on Friday.

KEY POINTS: * The Reuters/University of Michigan Surveys of Consumers said its final index of confidence fell deeper into recessionary territory, to 62.6 from 69.5 in March. * The reading was just below economists' median expectation of a reading of 63.2, according to a Reuters poll. * The April result is the lowest since March 1982's level of 62.0., when the "stagflationary" period of low growth and high inflation was still an issue for many Americans.

COMMENTS:

CARLEY GARNER, SENIOR ANALYST, ALARON TRADING, LAS VEGAS:

"The stock market seemed to have a much more dramatic reaction than the bond market did, although the bond market did find a little bit of footing. The problem in the bond market

at this point is that sentiment is extremely bearish, which tells me we're probably due for a bounce."

DAVID BIANCO, CHIEF US EQUITY STRATEGIST, UBS, NEW YORK:

"Irrelevant for the market. We have a consumer-led recession and the S&P 500 is showing that's irrelevant to them. Maybe that survey is interesting to the U.S. economy but from the perspective of someone looking at the S&P 500, it's irrelevant because we're having double-digit earnings growth from non-financial during a U.S. recession, it's a concern for small companies exposed to consumer. The S&P 500 is in a different world from the consumer. Period."

SUBODH KUMAR, CHIEF INVESTMENT STRATEGIST, SUBODH KUMAR &

ASSOCIATES, TORONTO, CANADA:

"When you look at energy prices, housing, the U.S. consumer is still under pressure. The consumer sentiment numbers will indicate that the recent bounce we've seen in consumer discretionary stocks is a bit premature. I don't think there's enough (catalysts) to drive the market to recovery levels for 2008 as people hope right now."

KEVIN FLANAGAN, FIXED INCOME STRATEGIST, GLOBAL WEALTH

MANAGEMENT, MORGAN STANLEY, PURCHASE, NEW YORK:

"Consumer confidence continues to tank. You are looking at quarter century lows, which is a not so subtle reminder especially to the Treasury market that even though the Fed may pause after next week's expected rate cut, they will be in no position to raise rates any time soon."

MARKET REACTION: * BONDS: Short dated U.S. Treasury debt prices edge higher. * CURRENCIES: U.S. dollar held gains against the euro. * STOCKS: Dow and S&P stock indexes turn negative. * RATE FUTURES: U.S. short-term interest rate futures point to 80 percent chance of an April Fed rate cut, up from 68 percent