NEW YORK (CNN/Money) - Consumer confidence tumbled in October, according to reports on the latest reading from the University of Michigan Friday, coming in well below Wall Street expectations.

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The U. Michigan preliminary reading on confidence in October sank to 87.5 percent from 94.2 in September, according to sources who spoke with Reuters about the survey, which is released only to paying subscribers. Economists surveyed by Briefing.com had forecast a reading of 94.0.

The report, based on an initial survey of about 300 households, found that sentiment about current business conditions also fell, to 99.6 from 103.7 in September, according to Reuters.

Consumers grew much more worried about the future, with the expectations component of the index sinking to 79.6 from 88.0.

Mark Vitner, economist with Wachovia Securities, said rising oil prices was a key factor in the big decline in confidence.

"Consumers are seeing it at the gas prices. That's taking a toll on confidence," he said. Other factors that could be weighing on consumers are concerns about the economy and a decline in the stock market in recent weeks.

"Stock prices have been faltering a little bit lately. I think that's also due to what we've seen in energy prices. People are expecting corporate earnings to weaken," he said.

Consumer confidence can be a major factor in consumer spending decisions, particularly for big-ticket items, and consumer spending fuels about two-thirds of the economy.

But the government's retail sales report for September, released earlier Friday, showed the biggest gain in six months, led by strong auto sales, which got a boost from heavy cash and financing incentives.

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The lower consumer confidence number is not good news for the President Bush's re-election chances either.

A reading below the 52-year average of 88.3 for the Michigan consumer confidence number normally suggests a loss for the incumbent's party, said ABC News' polling unit Director Gary Langer. ABC News conducts its own consumer confidence survey along with Money magazine.

Other consumer confidence surveys, including the Conference Board, have also produced lower readings that could point towards a win by Bush's opponent, Sen. John Kerry.