New York: Major US stock indexes bounced back on Tuesday, but trading was light with the outlook clouded by doubts before yet another summit to tackle the European debt crisis.
US stocks partly recovered from losses of more than 1% on Monday, led by housing shares after stronger-than-expected data on home prices.
The consumer discretionary sector was the top gainer on the S&P 500, followed by energy shares, which were boosted by a 2.3% jump in Brent crude prices.
Traders remained cautious as Spanish short-term borrowing costs nearly tripled and US consumer confidence fell in June to its lowest level in five months.
“Certainly in the United States stocks are nicely priced, and for a long-term investor it is an attractive entry point, but then what about these macro risks hovering around the market? I think it’s having a dampening effect,” said John De Clue, global market strategist at US Bank’s wealth management group in Minneapolis.
Spanish 10-year bond yields rose after demand at a shorter-term bill sale fell despite significantly higher yields. Hopes faded that the European Union summit later this week would produce game-changing measures to ease the debt crisis.
Madrid has formally asked for funds to bail out its banks in a move some see as a prelude for a full-blown bailout of the euro zone’s fourth-largest economy.
Rupert Murdoch’s News Corp said it was considering splitting into two publicly traded companies, and sources familiar with the matter said publishing would be separated from entertainment. Shares jumped 8.3% to $21.76 on volume of 73.1 million shares, making it the day’s most actively traded stock on the Nasdaq.
The Dow Jones industrial average rose 32.01 points, or 0.26%, to 12,534.67. The S&P 500 Index gained 6.27 points, or 0.48%, to 1,319.99. The Nasdaq Composite Index gained 17.90 points, or 0.63%, to 2,854.06.
About 5.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE Amex, below the daily average of 6.82 billion so far this year.
JPMorgan Chase & Co shares rose 1.1% to $35.71 after Goldman Sachs added the bank to its conviction buy list. Morgan Stanley, cut to “neutral” by Goldman, added 0.2% to $13.51.
The PHLX housing index jumped 2.6% after S&P/Case Shiller data showed home prices in 20 US metropolitan areas gained 0.7% on a seasonally adjusted basis, topping economists’ expectations for a 0.4% gain.
Facebook shares rose 3.2% to $33.10 a day before the underwriters of the online social network’s recent IPO are expected to release research on the company.
Advancing issues beat decliners on the New York Stock exchange by about 9 to 5 while on the Nasdaq almost seven issues rose for every five that fell.