NEW YORK (AP) — Investors remain cautious but are finding some room for optimism a day after a stock market slide.
Stocks mostly edged higher today after better-than-expected data on home construction, building permits and inflation eased some of the fears that have dogged investors in recent weeks about the speed of an economic recovery.
The modest moves after Monday’s big drop indicated that investors are still on edge that a three-month stock market rally could fizzle if the economy doesn’t show more signs it is emerging from the recession.
The Commerce Department said home construction jumped in May by the largest amount in three months. Construction of new homes and apartments jumped 17.2 percent last month to a seasonally adjusted annual rate of 532,000 units. That topped the 500,000 economists had been expected. Construction had fallen in April to a record low of 454,000 units.
Applications for building permits, which are seen as a good indicator of future activity, rose by 4 percent in May to an annual rate of 518,000 units.
The Labor Department said wholesale prices rose less than expected in May as a large jump in the price of gasoline offset a drop in food costs. The Producer Price Index increased by a seasonally adjusted 0.2 percent from April. That was below the increase of 0.6 percent analysts expected.
Not all the news was upbeat. The Federal Reserve said industrial production fell a larger-than-expected 1.1 percent in May as the recession hurt demand for manufactured goods including cars, machinery and household appliances.
“All in all I’m encouraged,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “But this is not a market that should be off to the races.”
In midmorning trading, the Dow Jones industrial average rose 6.73, or 0.1 percent, to 8,618.86. The broader Standard & Poor’s 500 index rose 2.21, or 0.2 percent, to 925.93, and the Nasdaq composite index rose 9.37, or 0.5 percent, to 1,825.75.
On Monday, the Dow tumbled 187 points, or 2.1 percent, putting it back into the red for the year. Last week, the blue chips was up on the year for the first time since January.
The dollar fell against other major currencies after jumping Monday. Gold prices rose.
The ease in the dollar helped push oil prices higher. Light, sweet crude rose $1.67 to $72.29 per barrel on the New York Mercantile Exchange.
The dollar’s weakness came after the Kremlin’s top economic adviser said Russia may put part of its currency reserves in bonds issued by Brazil, China and India. Arkady Dvorkovich said Russia could make the move if the other three nations reciprocate. Brazil, Russia, India and China are the members of the BRIC group of leading emerging economies.
The move could weaken demand for the dollar.
Business
<img src=" http://www.joplinglobeonline.com/images/zope/tuesday.gif" border=0> Stocks edge higher on housing, inflation data
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