Closing Market Report
Star-Bulletin news services
|
Stocks end higher after housing gain
By Tim Paradis
Associated Press
NEW YORK » Stocks advanced modestly yesterday after Wall Street shrugged off a sharp drop in orders for manufactured goods and took comfort in the first gain in existing home sales in eight months.
The rise in stocks came after investors showed little reaction to comments from Federal Reserve Chairman Ben Bernanke that he remains concerned that inflation or a steeper-than-expected decline in the housing market could harm an already slowing economy.
In the speech, which included Bernanke's most extensive comments on the economy since this summer, he said inflation remains higher than he would like but that it should fall as the economy cools.
The U.S. Commerce Department's report that orders for durable goods fell 8.3 percent in October -- the largest drop in more than six years -- stoked concerns that the economy is slowing at too fast a pace. But a report from the National Association of Realtors showing a slight uptick in home sales lent support to the market although it also revealed that the median selling price fell by the steepest level on record last month.
The market's muted response followed its worst session in more than four months on Monday. John Zielinski, a portfolio manager at Neuberger Berman, contends the market's drop was over-blown and that investors could be seeing lower-than-usual liquidity given that for many brokerages, tomorrow marks the end of their fiscal year and they are therefor trying to lock in gains.
"The moves seem to be a little bit exaggerated based on the data points we're seeing," he said.
The Dow Jones industrial average was up 14.74, or 0.12 percent, at 12,136.45, after falling 158 Monday.
Broader stock indicators also rose. The Standard & Poor's 500 index was up 4.82, or 0.35 percent, at 1,386.72, and the Nasdaq composite index rose 6.69, or 0.28 percent, to 2,412.61.
The Russell 2000 index of smaller companies rose 2.72, or 0.35 percent, to 774.82.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.67 billion shares, compared with 2.72 billion traded Monday.
Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.50 percent from 4.53 percent late Monday. The yield on the 10-year note had fallen to a nine-month low following the durable goods report.
The dollar fell for the sixth straight day against other major currencies, while gold prices also declined.
Light, sweet crude rose 67 cents to settle at $60.99 a barrel on the New York Mercantile Exchange.