Market rises: Focus less on Fed chatter, more on economy
NEW YORK — Wall Street got back to focusing on the economy instead of the Federal Reserve on Tuesday, sending stocks higher.
Four reports showed a brightening economy. Housing and manufacturing continued to improve, and consumer confidence reached its highest level in 5 1⁄2 years.
The major stock indexes closed higher, with the Dow Jones industrial average shooting up 100.75 points, or 0.7 percent, to 14,760.31. The Standard & Poor's index rose 14.94 points, or 1 percent, to 1,588.03.
The triple-digit rise in the Dow continues a bout of market volatility caused by investors and traders who are worried about the Fed ending its economic stimulus. Last Wednesday, Chairman Ben Bernanke said he expects the Fed to end its bond buying by the middle of 2014 if it feels the economy can manage without that stimulus.
The Dow then plunged by triple digits on three of the next four trading days, with investors worried that the market would struggle without the Fed propping it up.
Some investors have concluded that the recent sell-offs were overblown. Quincy Krosby, a market strategist at Prudential Financial, guessed that shorter-term traders were the ones buying stocks because they judged that parts of the market were “oversold.”
Long-term investors likely are still sitting on the sidelines, waiting for further signs that markets are becoming less volatile, she said.
Among the biggest gainers were big dividend payers such as phone and power companies. They have been hit the hardest by the recent sell-off.
The big economic reports revealed:
• Orders for durable goods rose 3.6 percent in May, matching April's gain. The gauge is important because manufacturing has generally struggled this year as demand for American exports slows in other parts of the world.
• Home prices rose 2.5 percent in April compared with March, the biggest month-over-month gain since 2000, according to the S&P/Case-Shiller index of 20 cities.
• The Conference Board's consumer confidence index jumped to 81.4 in June, the best reading since January 2008. The May reading, however, was revised to 74.3 from the original estimate of 76.2.
• Sales of new homes rose in May to a seasonally adjusted annual rate of 476,000, the Commerce Department said. That was the fastest pace since July 2008. Though sales of new homes remain below the 700,000 annual rate that is considered healthy, the pace has jumped 29 percent from a year ago.
The stronger economic news led investors to sell government bonds, a sign that they're more comfortable putting money in stocks. The yield on the 10-year Treasury note, a benchmark for many types of loans, rose to 2.6 percent from 2.54 percent on Monday.
Investors have been selling bonds in anticipation of the Fed winding down its bond-buying program.
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.
- Muni bond funds stressed
- Off-duty but on call: Suits seek overtime
- Shell shovels millions into proposed Beaver County plant site
- Extended oil slump takes toll
- FirstEnergy to build coal waste processing facility in Beaver County
- Ambridge’s PittMoss takes off with help from TV show, Mt. Lebanon native Cuban
- PPG puts brand 1st in strategy to reach commercial paint market
- U.S. Steel to debut oil, gas pipeline connector
- Post-Gazette offers voluntary buyouts in bid to avoid layoffs
- Chevy tweaks its truck remake
- Travelers find direct Web route to Priory’s spirited past in North Side