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Consumer data lifts stocks
NEW YORK >> A pair of encouraging economic reports -- one on consumer confidence, the other on home sales -- gave Wall Street a shot of adrenaline today, sending the Nasdaq composite to its best level in nearly a year.
The Dow Jones industrials also soared, moving up nearly 180 points.
"Housing sales were pretty good and consumer confidence was a decent number. People saw that as a positive and decided, 'Let's pick up some bargains,' after last week's declines," said Todd Leone, managing director of equity trading at SG Cowen Securities.
Trading was moderate following the long holiday weekend. U.S. markets were closed yesterday for Memorial Day. Advancing issues outnumbered decliners 5 to 2 on the New York Stock Exchange.
The Nasdaq climbed 46.60, or 3.1 percent, to close at 1,556.69, following a weekly loss of 1.9 percent to end a five-week winning streak. That was the highest level seen since June 5, 2002, when the tech-focused index closed at 1,595.26.
The Standard & Poor's 500 index advanced 18.26, or 2 percent, to 951.48, having dropped 1.2 percent last week to also end five weeks of gains. It was the highest level since Aug. 22, 2002, when the index closed at 962.70.
And the Dow rose 179.97, or 2.1 percent, to 8,781.35, having fallen 0.9 percent last week to snap a three-week winning streak. That was the best seen since Jan. 14, when the blue chips finished at 8,842.62.
The Russell 2000 index, which tracks smaller company stocks, rose 9.31, or 2.2 percent, to 427.71.
The price of the Treasury's 10-year note was down 23/32 point, while its yield rose to 3.42 percent from 3.33 percent late Friday. Two-year Treasury notes were up 1/32 point and yielded 1.31 percent, down from 1.34 percent late Friday.
The New York-based Conference Board reported today its consumer confidence index rose to 83.8 in May from 81 in the previous month as consumers grew modestly confident about the economy. Analysts had projected a reading of 84.
Meanwhile, the Commerce Department reported new home sales gained 1.7 percent from March to April to a seasonally adjusted annual rate of 1.03 million. That marked the best showing since December.
The reports helped overcome investor jitters after the euro briefly hit an all-time high against the dollar today. The Dow fell as much as 60 points in early trading on fears a weak dollar will deter foreign stock investment before rebounding.
After several weeks of market rallies on upbeat earnings, investors are looking for more concrete signs of economic recovery. Analysts say today's reports offered some of that evidence, but they added trading will likely be choppy until investors see more positive data.
ImClone Systems surged $4.75 to $24.60 after the company said it received a $6 million milestone payment from Merck KGaA for its cancer drug Erbitux.
Tenet Healthcare jumped 59 cents to $16.14 after chief executive Jeffrey Barbakow said he would resign. The hospital chain's Medicare payments is under investigation for possible improprieties.
Overseas, Japan's Nikkei stock average finished 1.3 percent lower. In Europe, France's CAC-40 rose 0.4 percent, Britain's FTSE 100 gained 0.3 percent and Germany's DAX index increased 1.6 percent.
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