From The Associated Press
NEW YORK —
U.S. stocks rose in early trading Tuesday, pushed higher by good reports on home prices and orders for durable goods.
Shortly after trading opened, the Dow Jones industrial average shot up as much as 118 points. At 10:15 a.m. Eastern Daylight Time it was up 67 points, or 0.4 percent, to 14,727.
The Standard & Poor’s index was up seven points, or 0.5 percent, to 1,581. Bank stocks, which sank the day before, rose the most of the 10 industry groups in the index.
Investors were encouraged by two main data points. The Commerce Department said U.S. businesses had boosted orders for long-lasting manufactured goods, including a surge in commercial aircraft orders. And the Standard & Poor’s/Case-Shiller 20-city home price index showed year-over-years gains in all cities tracked for the fourth straight month, a sign that the housing market is continuing to recover.
Shares of homebuilders, including Toll Brothers and KB Home, rose after the report. Homebuilder Lennar, which also reported quarterly results that beat analysts’ expectations, rose 3.4 percent, or $1.19, to $36.18. The company said that demand in all its housing markets continues to outpace supply.
In other economic reports, the Conference Board reported that consumer confidence rose sharply in June to the highest level in more than five years, bolstered by an improving outlook for hiring. Also, sales of new homes rose 2.1 percent last month at the fastest pace in five years.
The market’s performance Tuesday was a reversal from recent days, where the Dow has plunged by triple digits in three of the previous four trading days. Stocks plummeted Wednesday and Thursday after the Federal Reserve chairman, Ben Bernanke, said the Fed could start to rein in a bond-buying program that’s meant to stimulate the economy later this year. Though in some ways that is good news — after all, it means the Fed thinks the economy is improving — investors have largely treated the idea of a Fed pullback as bad news, worrying how the market will fare without the central bank propping it up.
The stronger economic news released Wednesday led investors to sell U.S. government debt, sending bond yields higher. The yield on the 10-year Treasury note, a benchmark for many kinds of loans, rose to 2.60 percent from 2.54 percent late Monday. Investors have also been selling bonds in anticipation of the Fed winding down its stimulus program.
Despite the gains in U.S. stocks, there were ample reminders of economic uncertainty around the world. Stocks continued to fall in China, where investors are fretting that the government’s new efforts to curb unregulated lending will hurt companies and choke already-slowing economic growth.
In debt-riddled Greece, new cabinet members met for the first time after a hasty reshuffling of top government posts that the prime minister was forced to agree to after his contentious order to close the state broadcaster, a move meant to save money. And the head of Germany’s central bank, Jens Weidmann, called for a “strict and thorough” review of the finances of European banks, even as the head of the European Central Bank, Mario Draghi, defended an ECB stimulus program that German leaders have criticized.
In other trading, the Nasdaq composite index was up 17 points, or 0.5 percent, to 3,335.
Commodities prices edged lower. Gold fell $2.30 to $1,274 an ounce and the price of crude oil fell 4 cents to $95.15 a barrel.
Among stocks making big moves:
—Walgreen, the nation’s largest drugstore chain, slipped after reporting earnings and revenue that missed analysts’ expectations — a result, the company said, of lower-than-expected sales outside the pharmacy. Walgreen fell $3.09, or 6.4 percent, to $44.97.
—Barnes & Noble dipped after reporting that its loss more than doubled in the latest quarter. The bookseller has struggled to compete with online retailers and discounters, and its Nook e-book continues to lose money. The stock fell $1.71, or 9.4 percent, to $17.11.
—Clothing chain Men’s Wearhouse rose after saying it had fired executive chairman George Zimmer, the company’s founder and star of its TV commercials, because he had advocated for “significant changes that would enable him to regain control.” The stock rose $1.90, or 5.4 percent, to $37.03.