Stocks rebound on home prices, earnings; Dow up 99
NEW YORK — The stock market bounced back on Tuesday as home prices surged and Europe's economy showed signs of recovery. Strong earnings reports also helped power the gains.
The Dow Jones industrial average ended the day 99.22 points higher at 13,979.30, erasing a large part of its loss from Monday. The index traded above 14,000 during the day before falling back in the last hour.
The Standard & Poor's 500 gained 15.59 points to 1,511.29. The Nasdaq composite was up 40.41 points to 3,171.58.
The rise follows two days of whiplash. On Monday, the Dow dropped 129 points, its worst sell-off of the year so far, as fears about Europe's finances resurfaced. The index gained 149 points Friday, closing above 14,000 for the first time since 2007.
With strong gains for stocks this year, investors are wondering whether they should sell now, or wait and see if the rally still has legs, said Brad Reynolds, chief investment officer at LJPR Inc.
Tuesday's advance was driven by data showing U.S. home prices rose in December at the fastest pace in more than six years. CoreLogic, a real estate data provider, reported that home prices rose 8.3 percent. In Europe, a measure of manufacturing and service businesses rose to a 10-month high January.
Stocks have gotten off to a strong start this year. The Dow advanced 5.8 percent in January, its best start to the year since 1994, according to data compiled to S&P Dow Jones indices. The S&P 500 rose 5 percent last month.
Lance Roberts, chief economist at Streettalk Advisors in Houston, Texas, said that's related more to the Federal Reserve's commitment to keep money cheap than to companies' performance. If earnings are beating estimates, he said, it's largely because expectations were so low.
The fact that individual investors are starting to return to stocks, as they have in recent weeks, is the latest sign that the market is due for a correction, Roberts and other analysts have said.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- W.V. entrepreneurs offer hope as coal fades as economic engine
- Demand for surveillance systems boosts sales for Vector Security
- Shell closing Franklin Park office next year
- University of Pittsburgh researchers revisit war of electric currents
- Cyber Monday increasingly a ‘blah-iday’ as deals rolled out earlier, longer
- Cage-free movement challenges chicken farmers
- Pennsylvania Game Commission reaps revenue from shale gas under game lands