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A private index of consumer confidence fell in May, giving stock and bond prices a lift Friday since it suggests the economy is not overheating and inflation is not an immediate problem.

The University of Michigan's midmonth report on consumer sentiment, which is not released publicly but is widely followed on Wall Street, fell to 89.9 from 92.7 in April, economists familiar with the numbers said.The school's index of future expectations declined a similar amount.

"It was kind of unexpected, frankly, because the other index, the Conference Board's, was fine," said Peter J. Canelo, chief investment strategist at NatWest Securities Corp.

The Conference Board's index of consumer confidence, released two weeks ago, showed an April increase to 105.3 from 98.4 in March.

News of the Michigan index's decline, as well as word that the U.S. trade deficit soared to $8.92 billion in March, drove stock and bond prices higher. The Dow Jones industrial average stood at 5,680.85 by late morning, up 45.80 points.

"The consumer being less enthusiastic, or less optimistic, would suggest that those fears of an overheating economy leading to Fed inflation fighting are premature," said William LeFevre, senior market analyst at Ehrenkrantz King Nussbaum Inc.

Signs of economic strength have been viewed as bad news on Wall Street recently on concern that the Federal Reserve will raise short-term interest rates to fight the inflation that a booming economy can produce.

Higher rates tend to slow consumer spending and hurt corporate profits.