Housing data lifts Wall Street slightly

Housing data lifts Wall Street slightly
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First Published: Wed, Jun 03 2009. 08 17 AM IST
Updated: Wed, Jun 03 2009. 08 17 AM IST
New York: US stocks rose for a fourth straight day on Tuesday as an upbeat report on home sales bolstered hopes for an economic recovery as well as shares in construction companies.
But a sell-off in financials on worries about the dilutive impact of recent stock offerings limited a broader advance.
An index of pending sales of previously owned US homes shot up 6.7% in April, the biggest monthly gain in 7-1/2 years, according to the National Association of Realtors.
The data suggested that the recession is easing, and investors snapped up shares of home builders, with Toll Brothers rising nearly 4 percent to $19.53, while DR Horton shot up 4.1% to $9.63.
The Dow Jones home construction index was up 3.2%.
Shares of big manufacturers also rose, with plane maker Boeing Co gaining 3.1% and ranking among the Dow’s major advancers. Exxon Mobil Corp, 3M Co, Coca-Cola and Alcoa Inc also bolstered the blue-chip average.
“Some news is starting to come out that says things are stabilizing and slowly starting to look better,” said Dan Faretta, senior market strategist at Lind-Waldock, a retail brokerage firm, in Chicago. “We’ve still got companies going under, filing for bankruptcy, and unemployment is continuing to rise ... but we are starting to finally hit the bottom.”
The Dow Jones industrial average added 19.43 points, or 0.22%, to 8,740.87. The Standard & Poor’s 500 Indexgained 1.87 points, or 0.20%, to 944.74. The Nasdaq Composite Index rose 8.12 points, or 0.44%, to 1,836.80.
For the S&P 500, the four-day advance represents the index’s longest winning streak since early April.
However, trading was volatile, with indexes swinging between gains and losses during the session.
The Dow industrials briefly turned positive for the year, rising as high as 8,787.13, before trimming gains.
After the bell, investors got some unsettling news when health insurer Aetna Inc slashed its 2009 forecast. The stock slid 7.6% to $25.19 after the bell, from a New York Stock Exchange close of $27.27.
During the regular session, the broader market came up against critical resistance a day after the S&P 500 hit a key technical milestone, finishing above its 200-day moving average for the first time since December 2007.
Since hitting a 12-year closing low on March 9, the S&P 500 has risen about 40%.
A drop in the US dollar against major foreign currencies also buoyed the shares of multinational companies. The dollar hit fresh lows against the euro on Tuesday as strong housing data weakened its safe-haven appeal.
Several US banks are raising capital to show they are capable of functioning without government support, in a move to free themselves from tight regulations after they received billions of dollars from the Treasury Department’s Troubled Asset Relief Program, or TARP.
Shares of JPMorgan, which sold $5 billion of stock, fell 4.5% to $34.50, putting the bank among the Dow’s top drags. Shares of American Express Co dropped 4.9% to $24.71 after the credit card company sold $500 million of stock. The KBW bank index fell 1.5%.
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First Published: Wed, Jun 03 2009. 08 17 AM IST
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