Stocks jump following rebound in home sales
POSTED: Tuesday, February 03, 2009
NEW YORK » Some heartening news on home sales and earnings yesterday has let Wall Street set aside a little of its angst.
Major stock indexes jumped more than 1 percent yesterday, and the Dow Jones industrials rose more than 140 points to snap a three-day slide as some of the day's data turned out to be more upbeat than expected. Still, analysts cautioned that the economy will keep showing fresh bruises in the coming months and that stock trading will remain volatile.
The National Association of Realtors said buyers stepped in to snap up properties at steep discounts in December, especially in the South and Midwest. Its seasonally adjusted index of pending sales for preowned homes rose 6.3 percent in the final month of the year from revised figures in November.
Stocks also rose on the strength of some corporate earnings. Drugmakers Merck & Co. and Schering-Plough Corp. helped lift the market after their quarterly numbers came in better than expected. Homebuilder D.R. Horton Inc. reported a loss for its latest quarter that was narrower than analysts expected. And shipper UPS Inc. rose on relief its quarterly results weren't worse.
The Dow Jones industrial average rose 141.53, or 1.78 percent, to 8,078.36.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 13.07, or 1.58 percent, to 838.51, and the Nasdaq composite index rose 21.87, or 1.46 percent, to 1,516.30.
The Dow and the S&P 500 had fallen for the past three sessions.
The Russell 2000 index of smaller companies rose 3.29, or 0.73 percent, to 452.90.
Losing stocks outnumbered gainers by 3 to 2 on the New York Stock Exchange, where consolidated volume came to 5.13 billion shares, compared with 4.94 billion traded Monday.
Bond prices fell yesterday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.88 percent from 2.72 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.32 percent from 0.26 percent late Monday. The three-month yield is at its highest level since December.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude rose 70 cents to settle at $40.78 a barrel on the New York Mercantile Exchange.
Companies reporting results were mixed. Merck rose $1.81, or 6.4 percent, to $30.24, while Schering Plough rose $1.44, or 8.2 percent, to $18.91. D.R. Horton jumped $1.31, or 21 percent, to $7.42, and UPS rose $2.58, or 6.1 percent, to $45.