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December 26, 2012

Stocks edge higher as traders return from holiday

From The Associated Press

NEW YORK — Stocks opened modestly higher on Wall Street Wednesday as traders returned from the Christmas holiday.

Trading was quiet. Markets in Europe were still closed. Traders were also watching to see if a budget agreement materializes in Washington. President Barack Obama cut short his Christmas vacation in Hawaii and was returning to Washington later Wednesday to resume budget talks with Congressional Republicans.

The Dow Jones industrial average was up 21 points at 13,160 as of 10:19 a.m. Eastern.

The Standard & Poor’s 500 index was up half a point at 1,427 and the Nasdaq composite was up less than a point at 3,014.

Better news about the housing market was tempered by disappointing readings on the U.S. holiday shopping season.

Home prices rose in most major U.S. cities in October compared with the same month a year ago, according to the latest Standard & Poor’s/Case-Shiller national home price index. Sales rose at the same time the supply of available homes declined. The index increased 4.3 percent, the largest year-over-year jump in two and a half years, when a homebuyer tax credit temporarily boosted sales.

The news on holiday shopping wasn’t encouraging. In the two months before Christmas, sales of electronics, clothing, jewelry and home goods increased just 0.7 percent compared with the same period last year, according to The MasterCard Advisors SpendingPulse report.

That’s well below the growth of 3 to 4 percent growth that analysts had expected and the worst year-over-year comparison since 2008, when spending shrank during the Great Recession. Last year sales climbed 4 to 5 percent during November and December, according to ShopperTrak.

Major retailers fell. Macy’s gave up 52 cents to $37, Target fell 41 cents to $59.13 and Urban Outfitters fell 61 cents to $38.59.

Home builder stocks were higher following the increase in home prices. Lennar rose 26 cents to $38.54 and PulteGroup rose 9 cents to $18.24.

Netflix and Amazon both fell after Netflix blamed Amazon for an outage over Christmas eve that that affected customers wanting to stream video. Netflix fell 84 cents to $89.39 and Amazon fell $2.85 to $255.77.

The yield on the benchmark 10-year Treasury note edged down to 1.76 percent from 1.77 percent Monday. Trading was closed Tuesday for the Christmas holiday. Oil prices rose. Benchmark crude gained $2.37 to $90.98 a barrel.  

Japanese stocks hit a nine-month high as a pro-business government prepared to assume leadership. The Nikkei 225 index surged 1.5 percent to 10,230.36.

Japan’s new prime minister, Shinzo Abe, has put pressure on the Bank of Japan to raise its inflation target. The goal is to extricate the country from two decades of deflation, or declining prices, which has deadened the world’s third-largest economy.

 

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