-->

A closely watched index of consumer sentiment rose to its highest level since 2007 as consumers expressed positive views both about the outlook for the economy and for their own personal financial prospects. That confidence level comes on top of falling gas prices, which is putting more money in consumers pockets, and upticks in personal savings rates.

Still, the market has a notoriously short memory, and some of the problems that spooked the market in the middle of the month havent gone away. Chief among them is Europe, which is struggling to stay out of a recession and where a Japanese-style stimulus is much harder to pull off for political and structural reasons.

And the US has its own structural economic problems that could weigh on the market. John Lonski, an analyst at research firm Moodys Analytics, noted that the recovery has been concentrated in the corporate sector and at mostly upper income levels.