INDEPENDENT NEWS

While you were sleeping: Wall Street extends rise

Published: Thu 28 Feb 2013 07:45 AM
While you were sleeping: Wall Street extends rise
Feb 28 (BusinessDesk) – Wall Street rallied for a second day as stronger-than-expected reports on US business spending and the housing market bolstered optimism about the sustainability of the economic recovery.
In afternoon trading in New York, the Dow Jones Industrial Average advanced 0.94 percent, the Standard & Poor's 500 Index added 1.09 percent, while the Nasdaq Composite Index climbed 1.14 percent.
Orders for durable goods excluding transportation equipment posted their biggest gain in a year, suggesting further strength ahead.
"The encouraging tone of this report suggests that the business sector is beginning to feel sufficiently confident about the improving economic outlook to commit to investment activity," Millan Mulraine, a senior economist at TD Securities in New York, told Reuters.
Separately, the National Association of Realtors said its pending home sales index climbed 4.5 percent to 105.9 in January, the highest reading since April 2010, from a downwardly revised 101.3 in December.
Declining inventory is the key to this year's housing market outlook, according to NAR.
"Favourable affordability conditions and job growth have unleashed a pent-up demand," Lawrence Yun, NAR chief economist, said in a statement. "Most areas are drawing down housing inventory, which has shifted the supply/demand balance to sellers in much of the country. It's also why we're experiencing the strongest price growth in more than seven years."
In Europe, the mood was buoyed by indications that confidence in the euro zone rose more than expected in February. An index of executive and consumer sentiment increased to 91.1 from a revised 89.5 in January, according to the European Commission.
Europe's Stoxx 600 Index climbed 0.9 percent from the previous close. The UK’s FTSE 100 rose 0.9 percent, Germany’s DAX Index increased 1 percent, while France’s CAC 40 jumped 1.9 percent. The euro strengthened 0.3 percent against the greenback and 0.1 percent against the yen.
Nerves about the outcome of Italy's elections appeared to have settled, as Italy’s benchmark stock index advanced 1.8 percent, while investors bought 6.5 billion euros of five- and 10-year of new debt auctioned by the country today.
“The auction has cleared with strong demand and better-than-expected yield levels,” Owen Callan, an analyst at Danske Bank in Dublin, told Bloomberg. There is “very strong demand for the 10 year in particular, which is encouraging. It shows that fears of a rapid disintegration of investor sentiment toward Italy may be overstated.”
Meanwhile, PIMCO's Bill Gross warned that gains in debt might be limited.
“Corporate credit and high yield bonds are somewhat exuberantly and irrationally priced,” Gross wrote in a note published on PIMCO's website. “Spreads are tight, corporate profit margins are at record peaks with room to fall, and the economy is still fragile.”
"Still that doesn’t mean you should vacate your portfolio of them."
(BusinessDesk)

Next in Business, Science, and Tech

General Practices Begin Issuing Clause 14 Notices In Relation To The NZNO Primary Practice Pay Equity Claim
By: Genpro
Global Screen Industry Unites For Streaming Platform Regulation And Intellectual Property Protections
By: SPADA
View as: DESKTOP | MOBILE © Scoop Media